GBP/JPY confirmed that the rebound off the 3-year low of 126.53 is more than temporary after rallying above the 135.50 resistance area. Backing this is the intact bullish cross and the recent turn up in the slopes of the 20- and 50-day simple moving averages (SMAs).
The bullish action gained extra credibility following the break above the 50% Fibonacci of the 149.47-126.53 bearish wave and the 200-day SMA, with the market turning overbought near the five-month high of 141.47 according to the RSI, which is trying to make its way down.
Considering the slowing MACD too, some weakness may persist in the short-term and traders could look for immediate support somewhere between the 200-day SMA and the 50% Fibonacci of 138.00. A warning signal, however, could only come near 135.50, where any decisive close lower would put the August upturn back into doubt and switch the medium-term outlook from positive to neutral.
Should the bulls successfully clear the 61.8% Fibonacci of 140.70, the next target will be the 143.70 former support area, if the 5-month high of 141.47 fails to hold as well. Running slightly higher, the long-term descending trendline taken from the 2018 top of 156.59 could prove a tougher obstacle to get through. In case buying interest persists above that line, resistance may next emerge near the 146.50 barrier.
In brief, positive momentum could ease in the short-term, though only a close below 135.50 would eliminate optimism over an up-trending market, downgrading the positive outlook in the medium-term picture too.