GBPJPY is looking more neutral in the very short-term as prices are hovering above the simple moving averages (SMAs) and within the 138.55 – 140.18 region. Hence the upside momentum in the last week appears to have run out of steam as prices have been attempting and failing to close above the five-and-a-half-month high of 140.18.
The technical indicators seem to be mixed. The MACD is slightly strengthening its momentum above its trigger line, while the RSI is pointing down in the positive region.
Should the pair manage to strengthen its positive momentum, the next resistance could come around 140.18. A break above this level would shift the bias to a more bullish one in the medium term and open the way towards the 140.83 barrier, taken from the inside swing low on February 4. Above this level, the next target could come in the 142.33 area, registered on February 18.
However, if prices are unable to break the multi-month high, the risk would shift back to the downside, with the 20-period SMA at 139.35 and the 40-period SMA at 139.09 coming into focus as well as the 138.55 support, which overlaps with the ascending trend line. A drop below the diagonal line would signal a downward move, touching the 23.6% Fibonacci retracement level of the up leg from 131.93 to 140.18 at 138.23, before hitting the 137.40 – 137.83 support zone.
In the bigger picture, GBPJPY has been developing within an upward movement over the last couple of months remaining above the SMAs and the Ichimoku cloud.
