GBPJPY unlocked a fresh three-month high of 145.93 early on Tuesday after a rally above its 200-day moving average on Monday. The bullish momentum in the MACD points to further improvement in the short-term. Yet with the RSI approaching its 70 overbought mark and the stochastic oscillator fluctuating above its own 80 overbought level, the bears could soon take over.
Additional gains could send the price above today’s peak of 145.93 – where the 78.6% Fibonacci of the downleg from 149.70 to 132.49 is standing – and towards the previous key support area of 147.20. Another leg higher could touch the 148 psychological mark before a more meaningful battle starts around 149.70-150.
On the flipside, if the recent rally proves overdone, the pair could shift down to meet the 200-day MA at 144.70. Heading lower, support could next be found in the crossroads of the 61.8% Fibonacci and the 20-day MA at 143.12, while under the 50% Fibonacci of 141.10 and more importantly below the 139.80 level, questions over the sustainability of the latest upward pattern would arise.
In the medium-term picture, GBPJPY has switched to neutral thanks to the rebound off the 50% Fibonacci. The little improvement in the 50-day MA raises hopes that a bull market could soon come back into play.
