GBPJPY Bullish Trend Dims; 20-SMA in Focus

Technical analysis of Forex market

GBPJPY is mirroring fading buying interest as negative momentum escalated on Thursday, confirming a lower high at 167.82.

Similarly, the RSI seems to be following a negative trajectory after failing to reach its previous high, while the negative turn in the Stochastics and the MACD is also reflecting some discomfort among traders.

Optimism, however, has not completely vanished as the 20-day simple moving average (SMA), which has been a crucial support region over the past week, is still intact. The 23.6% Fibonacci retracement of the 150.96 – 168.70 upleg is also in the same neighborhood at 164.53 along with a dashed ascending trendline. If selling tendencies, however, break that floor, the 50-day SMA currently at 162.11 may immediately come under the spotlight ahead of the 50% Fibonacci of 161.95. Slightly lower, a tentative upward-sloping trendline may attract some attention around 161.00 before traders target the 61.8% Fibonacci of 159.86.

Alternatively, should the 20-day SMA cease downside pressures, the pair may push for a close above the short-term tentative resistance trendline and the 167.70 former restrictive zone. In case the bulls accelerate above the six-year high of 168.70 too, the next barricade may pop up somewhere near 170.50 taken from January-February 2016.

In brief, the positive trend in GBPJPY seems to be losing steam, though the bulls may not give up the battle yet unless the base at 164.53 collapses.

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