21 Apr GBPJPY Overview
In this article, I would like to analyze the daily chart of the GBPJPY currency pair. The markup is very simple – at the top, you see a red line, this is a long term resistance level. I also built three blue wavy lines. The upper line acted as a resistance for the growth of prices for several months from mid-October 2019 to the end of February 2020. The average line acted as support last summer, and it’s interesting that during the decline which began in late February 2020, the price found support at the middle line. It happened on 9 March 2020  – then the price closed far from the lows. And the next day, 10 March  the price gained bullish momentum continuing.
But that was all that it was capable of supporting the blue line. And the decrease in price has resumed further under the impact of negative news on the coronavirus.
The decline ended with the panic of 18 March . It is interesting that the very bottom of the panic day coincided with the lower blue line. Please note that the distances between the upper, middle and lower lines are the same. Thus, using the principle of parallel equidistant lines, you could detect the bottom of panic with high accuracy.
What happened next – the price has grown from the low of the panic day on March 18 and reached the midline. In this place, we have seen a repetition of the classical principle, when the broken support line acts as resistance. On March 27 the price reversed down for the first time , 9 APR it reversed down a second time .
And March 15, we see the increase of spread on down-bar and new local lows with a normal increase in volume.
What does all it mean?
This is bearish behavior, and it means the market creates all conditions for the development of the downtrend. Thus, the market is a more pessimistic mood and short positions are more of a priority, in my opinion.