The chart provided is a 4-hour (H4) analysis of GBP/JPY (GJ), incorporating Fibonacci retracement levels, a projected bullish move, and potential daily targets. Below is a detailed breakdown with the inclusion of Fair Value Gaps (FVGs) and session theory for a more comprehensive outlook.
—
Key Observations:
Fibonacci Levels and Price Action:
1. Fibonacci Retracement Zone:
– The 0.5 (190.420) and 0.618 (189.804) levels are highlighted as key retracement zones where price may pull back before continuing its upward trajectory.
– Price is currently near 190.868, indicating it is within range to test these levels for support before a potential bullish continuation.
2. Projected Bullish Move:
– A green arrow indicates an anticipated bullish move from the Fibonacci retracement zone toward the daily target at 193.059.
– This projection suggests a higher low formation at the retracement zone, aligning with bullish market structure.
Fair Value Gaps (FVGs):
– FVG Identification:
– The chart does not explicitly mark FVGs, but they can be inferred in areas where price has moved impulsively, leaving inefficiencies or untested zones.
– A potential FVG exists between the 0.5 and 0.618 Fibonacci levels, where price may revisit to fill the imbalance before resuming its upward momentum.
– Role of FVGs in the Setup:
– The FVG within the retracement zone aligns with the expectation of a pullback to support levels, offering high-probability entry points for long positions.
Session Theory:
1. Asian Session:
– During the Asian session, price may consolidate or test the Fibonacci retracement zone as liquidity builds for the next move.
– Watch for low volatility during this session, which could set up the pullback.
2. London Session:
– The London session often brings increased volatility and directional moves.
– A bullish breakout from the retracement zone could occur during this session, aligning with the projected upward move toward 193.059.
3. New York Session:
– The New York session may provide additional momentum to extend the bullish move or retest breakout levels.
– If price reaches near the daily target during this session, expect potential resistance or consolidation around 193.059.