GBPJPY is retreating from the 50.0% Fibonacci retracement level of the downward move from 144.95 to 124.00 at 134.48 but has been developing in an upside correction wave over the last two weeks. The price has had a successful attempt above the mid-level of the Bollinger Band as the three-and-a-half year low of 124.00 acted as a crucial support for the bears.
From a technical viewpoint, the MACD oscillator, which is still below the zero line, is hovering above its trigger line and is gaining some ground with weaker momentum than before. Additionally, the RSI indicator is pointing marginally north near its 50-neutral area.
A closing price above the 134.75 resistance level could boost buying interest and confirm additional gains towards the 40-day simple moving average (SMA) currently at 136.08 and the 61.8% Fibonacci of 139.90, which stands near the upper Bollinger band. Higher still, the 138.70 barrier, which is below the 100-day SMA at 139.85, could also react as a strong resistance and shift the negative bias to neutral in the short-term.
In the event of a drop-off below the 38.2% Fibonacci of 132.00 and the mid-level of the Bollinger Band, the bears may push harder to clear the 23.6% Fibonacci floor at 128.92 and head for the three-and-a-half-year bottom of 124.00.
Meanwhile in the medium-term picture, the outlook remains strongly bearish following this month’s free-fall, with traders waiting a rally above 148.00 level to eliminate fears of a down-trending market.
