GBP/JPY technical analysis
Technical analysis of GBP/JPY is concerned with chart patterns, technical indicators and historical price action. By conducting this form of analysis on the pair, some traders believe you can identify what its price might do next.
We’ve listed the three main types of technical analysis you can use to study GBP/JPY in the next sections.
Technical indicators are mathematical calculations, plotted as lines on a price chart, that can help you identify certain signals and trends within your chosen market.
There are different types of trading indicator, including leading indicators and lagging indicators.
In the case of GBP/JPY, a leading indicator is a forecast signal that predicts future price movements of the pair. A lagging indicator looks at past trends of the currency pair and indicates its momentum. You can use your knowledge and risk appetite as a measure to decide which indicators best suit your forex trading strategy.
A chart pattern is a shape within a price chart that helps to suggest what a currency pair’s price might do next, based on what it has done in the past. In other words, it will highlight different trends of the GBP/JPY pair.
Certain chart patterns are more suited to a market as volatile as forex. Therefore, it is important to know which chart pattern is more befitting to GBP/JPY trading and investing, as to avoid missing out on an opportunity to profit.
Candlesticks – or candles – show the price movement of an asset, for example GBP/JPY, over a set amount of time. The shape and colour of the candles can be used to help predict future market movements.
Candlesticks display price movements from a minute to a day, depending on the price chart. They display four different price levels that an asset has reached in the specified time period: the lowest point in its price, the highest point, and the open and close prices.
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