GBPJPY Takes A Breather But Route Remains Northbound

Technical analysis of Forex market

GBPJPY has temporarily ceased its bullish bearing at a resistance belt, moulded between the 156.00 hurdle and the peak of February 2018 at 156.60. Nonetheless, the climbing simple moving averages (SMAs) are endorsing the broader bullish structure, while the Ichimoku lines are conveying that the positive drive in the pair remains fairly intact.

The short-term oscillators reflect the recent pause in the pair’s climb but seem to be indicating that positive momentum may soon pick up. The MACD, in positive territory, is only just beneath its flattening red trigger line and looks set to return above it. The RSI is attempting to sustain improvements in the positive region, while the stochastic %K line is steering higher, signalling growing positive sentiment.

To the upside, delaying further price developments is the immediate resistance barrier of 156.00-156.60, which also involves the near 40-month peak of 156.06. Should the recent ascent, which began from the 149.04 low, successfully extend past this durable aforementioned obstacle, the pair may then shoot for the 157.89 border. Overshooting this too, which happens to be the 161.8% Fibonacci extension of the down leg from 144.94 until 124.00, could encourage buyers to log additional improvements towards the 160.09 peak, where the pair’s price collapsed back in late June 2016.

If sellers regain control, initial downside friction could occur at the red Tenkan-sen line at 154.90 before they meet the support barricade of 153.13-153.83. If a price pullback acquires extra force, the price may then slip towards the 50-day SMA at 152.53 before tackling the Ichimoku cloud. Losing more ground could see the pair test the 151.22 low before the 100-day SMA, currently at 150.02, attempts to provide a defence to shield the positive picture.

Summarizing, GBPJPY is sustaining its bullish stance above the SMAs and the 153.13-153.83 base. Yet, a dive below the cloud could trigger negative pressures, while a close below 149.04 trough could significantly nourish them.