GBP/JPY: Is the Sell-Off Really Over？

British Pound / Japanese Yen Long 10 hours ago 2 Grab this chart Grab this chart 4 4 85 GBP/JPYs market structure deteriorated significantly following the rejection from the 217.00–217.70 area. Since then, the pair has developed strong bearish momentum, initially breaking below the weekly support at 211.84 and then losing the key 209.50 level. However, given the strength of the bearish move, I do not consider the simple arrival inside this area sufficient reason to enter a long position. The liquidity resting below the recent lows could attract another bearish extension towards the deeper demand zone between 206.50 and 205.20. This is the area where I will assess whether the market is genuinely ready to build a recovery or whether the current weakness is likely to continue. COT Report: According to the latest data, Non-Commercial traders are net short on both the British pound and the Japanese yen. GBP positioning: • 85,386 long contracts • 134,961 short contracts • Net position: −49,575 contracts JPY positioning: • 117,169 long contracts • 209,396 short contracts • Net position: −92,227 contracts During the latest reporting week, positioning on the British pound weakened. However, the deterioration in Japanese yen positioning was considerably more pronounced. From a relative perspective, this divergence could potentially support GBP/JPY. Retail Sentiment: Approximately 86% of retail traders are currently long GBP/JPY, while only 14% are positioned short. From a contrarian perspective, this concentration of long positions is a warning signal. September Seasonality: September seasonality does not provide a completely consistent directional signal: • 20-year average: +0.30% • 15-year average: −0.17% • 10-year average: +1.51% • 5-year average: +1.98% • 2-year average: −3.33% The five- and ten-year samples support the possibility of a recovery, while the most recent two-year sample shows significant weakness. I therefore consider seasonality neutral and will use it only as secondary confirmation. My short-term bias remains bearish while GBP/JPY trades below the 209.50–210.84 resistance area. I am not interested in trying to predict the exact bottom. A potential long setup would become attractive only if the market produces the following sequence: - A liquidity sweep or bearish extension into 206.50–205.20. - A decisive reaction showing absorption of selling pressure. - A recovery above the 207.80–208.20 area. - A bullish CHOCH or BOS on the lower timeframes. - A successful retest of the newly established structure before entry. If these confirmations develop, my potential upside targets would be: • 209.00 • 209.50 • 210.84 • 211.84–212.22 Conversely, a sustained close below 205.20 would invalidate my recovery scenario and increase the probability of another bearish extension. EdgeTradingJourney Follow Following 📈 Nicola | EdgeTradingJourney Documenting my path to $1M in prop capital through real trading, discipline, and analysis. Also on : Chart Patterns COT fed Fundamental Analysis GBPJPY Gold ict opec signals strategy Trend Analysis Disclaimer The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use . Chart Patterns COT fed Fundamental Analysis GBPJPY Gold ict opec signals strategy Trend Analysis EdgeTradingJourney Follow Following 📈 Nicola | EdgeTradingJourney Documenting my path to $1M in prop capital through real trading, discipline, and analysis. Also on : Disclaimer The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use .