GBPJPY Dips Below 151 but 23.6% Fibo Keeps Things Positive

Technical analysis of Forex market

GBPJPY is not out of the woods just yet, in spite of finding some footing around the 150.96 level, that being the 23.6% Fibonacci retracement of the up leg from 134.39 until 156.06. Although downside forces have abated at 150.65, the Ichimoku lines have thus far kept their diving demeanour. The simple moving averages (SMAs) are sustaining a bullish bearing but the 50-day SMA’s incline has softened a tad with the fading in the pair. However, it has yet to convey that the bears are decisively shifting the near-term sentiment to the downside.

The short-term oscillators are indicating that positive momentum is growing from the 23.6% Fibo level. The MACD is flattening slightly beneath its red trigger and zero lines, while the RSI, marginally above the 30 level, is pointing north. Furthermore, the stochastic oscillator’s %K line is pushing above the 20 mark, endorsing bullish price behaviour.

If the price maintains its upward thrust, sturdy constraints to advances could develop from the 100-day SMA, attached to the Ichimoku cloud’s lower surface at 152.57, until the 50-day SMA at 153.96. Triumphing over these congested obstacles, the pair may then meet the June 23 high of 155.14. Any efforts in the pair to improve further could result in the bulls challenging the resistance belt, moulded between the multi-year high of 156.06 and the peak of the February 2018 rally at 156.60.

If selling orders increase, initial support could be revived at the 23.6% Fibo of 150.96 and the 150.65 low. However, a deeper retracement may direct the pair towards a test of the support base of 148.51-149.41. If this foundation proves temporary, lingering beneath is the border of 147.39-148.10. Should sellers accelerate the downward pace, testing the 146.40 low and 200-day SMA at 146.17, this could throw into question the sustainability of the positive structure.

Summarizing, GBPJPY is exhibiting a sluggish positive tone in the short-term above the 148.51-149.41 support base. A push above the cloud could reinstate a stronger bullish mood.