GBPJPY topped September’s rally at a familiar place of 135.64 on Wednesday and reversed lower to retest the 20-period simple moving average (SMA) in the four-hour chart.
Given that the RSI is hovering slightly above its 50 neutral mark and the red Tenkan-sen line has flattened above the blue Kijun sen, the risk in the short-term is currently viewed as neutral-to-bullish.
Should the price overcome the 1 ½-month high of 135.64, the bulls could strengthen towards the 136.26 handle, while a break of the 137.00-137.77 area could open the door for the 138.30 resistance level. Any close above the latter would put the March downtrend under speculation.
On the downside, the spotlight is on the 134.40 mark, where the decline stalled earlier today. In case the pair fails to hold above it, traders could look for support between 133.85 and the 23.6% Fibonacci of 133.52 of the upleg from 126.66 to 135.64. Correcting lower, the market would get exposed to the 132.65-132.20 zone, which if decisively violated, could add more bearish pressure to the market.
In the bigger picture, GBPJPY is near to exit the neutral zone and turn positive, with the upward-sloping 50-period SMA suggesting that an outlook improvement is highly likely.
Summarizing, GBPJPY is anticipated to hold a neutral-to-bullish profile both in the short- and the bigger picture.
