Time for the Forex market. Today’s hero is the GBPJPY, where we do have a nice sell signal. For the last time, we wrote about this pair on the 20th of September and we were bearish. Nice but the thing is that for the previous few weeks, the price was locked inside of a sideways trend and the bearish potential is realised just now. This is what we wrote back then:
“That cancels the positive sentiment, at least for a while. Now, the price is creating a small pennant (blue). That formation being below the up trendline is a negative sign and promotes a further drop. „
After those words were written, the price created a triangle pattern (orange lines). On Friday, the price broke the lower line of the triangle, which was a first warning signs about the potential troubles. Monday is even worse and starts with a breakout of the important supports. First one – the horizontal one (pink) on the 147 and the second one – dynamic (black), which is the long-term up trendline. With those three supports being gone, we do not have an other option than go down. The sell signal is on, as long as we stay below the pink area.