GBPJPY’s Advances Capped By 50-Day SMA, Pair Adopts Neutral Tone

Technical analysis of Forex market

GBPJPY appears to have stalled around the mid-Bollinger band at 135.78, after efforts to push higher were curbed by the 50-day simple moving average (SMA). The pair is edging east as directional momentum has taken the back seat. Despite their recent bullish crossovers, the fading slopes of the converging 50- and 100-day SMAs are endorsing a sideways market, while the relatively horizontal tone of the 200-day SMA also backs this view.

Currently, the short-term oscillators reflect conflicting signals in directional momentum. The MACD, in the negative zone, is increasing above its red trigger line and is attempting to break above its zero mark. Yet, the RSI is hovering underneath its neutral threshold, while the stochastic oscillator shows cracks in its negative charge, as the %K line starts to stall its decline.

If sellers dip past the mid-Bollinger band at 135.78, early support may commence from the 135.04 barrier and the 134.51 level underneath, that being the 50.0% Fibonacci retracement of the down leg from 144.94 to 124.00. Continuing downwards, the lower Bollinger band at 133.59 and the adjacent 133.03 key trough may attempt to halt the decline. Should a decisive dive deeper conquer the congested lows of 131.94 and 131.75 respectively, the price may then test the 130.66 obstacle.

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To the upside, heavy resistance may originate from the 200-day SMA until the 61.8% Fibo of 136.97, which also contains the 100-day SMA of 136.60. Surpassing this fortified zone, the 50-day SMA at 137.58 and the nearby upper Bollinger band may challenge the climb, currently in-line with the 138.34 critical peak. Conquering these boundaries, the pair may shoot for the 76.4% Fibo of 140.00 before targeting the 141.42 high.

As no clear and definitive signs of direction have formed, GBPJPY looks increasingly destined to adopt a horizontal shape. A break either below 133.03 or above 138.34 may pave the next price path in the broader picture.