GBPJPY Set For Neutral Close But Bears Still Present

Technical analysis of Forex market

GBPJPY returned to Monday’s opening price on Friday, aiming for a neutral weekly close around 152.60, where the 20-period simple moving average (SMA) has been buffering negative movements since the start of October in the weekly chart.

The price has erased a large portion of the October rally and the momentum indicators keep the short-term bias tilted to the downside. Both the RSI and the fast-Stochastics are making attempts for an upside reversal, though they are still comfortably dipped in the bearish territory, while the MACD continues to dig southwards in the negative region, suggesting the bears are still present.

A decisive close below the 200-day SMA at 152.15 could motivate fresh selling towards the crucial long-term supportive trendline at 151.25 drawn from the 2020 bottoms. Slightly lower, the broken descending trendline stretched from 150.85 could provide another opportunity for a rebound, preventing an outlook deterioration and a drop towards the 149.90 region.

Should buyers take control, the price may push for a close above the nearby resistance of 153.50. Piercing that bar, buying forces could amplify towards the 20-day SMA currently at 155.35. A step higher from here could get congested within the 156.00 – 156.65 area before the focus shifts to the top of 158.20.

In brief, the sell-off in GBPJPY could get more legs in the short term unless the price manages to recover above 152.60.