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GBPJPY Extends Swift Upturn, Key Resistance Overhead

GBPJPY has swiftly turned up following the consolidation around the 149.50 support area, with the price breaching the limits from the 200-day simple moving average (SMA) to peak at a one-month high, nearly around the 153.00 level early on Thursday.

Bullish pressures could persist in the short term according to the momentum indicators. The RSI has pierced above its 50 neutral mark and it is rapidly gaining ground within the bullish territory. Likewise, the MACD is quickly recovering within the negative area and above its red signal line, while the Stochastics are also changing course to the upside, all signaling further progress in the market.

Yet, the way up could be rocky, and the bulls will need to push harder to keep the upper hand as the long-term supportive trendline drawn from the 2020 bottom could switch to resistance with the help of the 50-day SMA around the 153.16 area. The 50% Fibonacci retracement of the latest downleg at 153.58 and the 154.00 hurdle are also within breathing distance, making any moves towards the 61.8% Fibonacci of 155.26 less likely.

In the bearish scenario, where the price returns below the 200-day SMA, the 23.6% Fibonacci of 151.14 and the 20-day SMA may deter any declines towards the 149.50 support region. If the bears manage to break the floor between 148.96 – 148.45 too, then the price may continue lower to test February’s low of 147.38. Such a move would downgrade the broad picture from neutral to bearish.

In summary, the ongoing bullish corrective move in GBPJPY could keep buying interest intact in the short term, though traders may wisely wait for a sustainable break above 154.00 to raise exposure in the market. Besides, a significant close above 154.00 is required to dissolve the downward pattern from 158.20.

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