GBPJPY has been declining over the last six weeks, falling back below the 20- and 40-day simple moving averages (SMAs) and the 132.00 psychological level, being the 38.2% Fibonacci mark of the down leg from 144.95 to 124.00.
According to the momentum indicators, the stochastics are posting a bearish crossover within the %K and %D lines below the overbought region, while the RSI is edging lower in the negative threshold.
In case of steeper declines, the price could touch the 23.6% Fibonacci of 128.94 ahead of the 127.27 support. Should the price retreat under that number too, the three-and-a-half year low of 124.00 achieved on March 18 could come under speculation.
In the positive scenario, the pair could improve above the 132.00 handle and the 20-day SMA meeting the 40-day SMA currently at 132.93. The 50.0% Fibonacci of 134.42 and the 135.80 resistance, which strictly capped bullish action over the last month, remain the big highlights. Even higher, the 100-day SMA at 136.50 and the 61.8% Fibonacci, which coincides with the flat 200-day SMA could open the door for possible bullish actions in the near term.
Meanwhile, in the medium-term picture, the situation seems to be getting more interesting as the 100- and the 200-day SMAs are heading for a bearish cross. Should the lines intersect each other and keep a large distance, the negative outlook may turn even gloomier.