The GBPJPY pair has been moving in an upward trend for the last three weeks. On the daily chart, an Inside Bar formation is formed.
The daily candle from Friday (5 June) which formed this pattern closed below the S/R level at 139.17, signalling the rejection of this resistance. Today’s daily candle 3 hours before closing forms a Inside Bar with Friday’s candle.
Also the situation is interesting on the H4 chart (below). Here, too, an inside bar was formed, which the price has left today in a rather dynamic way.
On the occasion of the breakout from IB a downward divergence was formed on the MACD, which usually confirms that the direction of the breakout remains the same for a few more candles.
In addition, we should note that the next four-hour candle has crossed the local trend line. Declines seem very likely, the supply target may be the nearest demand zone around 136.50. A good level to take a short position will be a possible re-test of the lower edge of IB.
A big support for the bearish scenario would be a maximum on the MACD in the daily chart and the transition of the oscillator to the downward phase.
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