GBPJPY has been developing in an ascending movement since March 18, reaching a fresh six-month high of 142.70, returning lower, suggesting a downside retracement in the daily timeframe.
The pair is hovering above the short- and medium-term simple moving averages (SMAs), though the momentum indicators are heading south. The RSI pulled back from the overbought zone and is flattening, while the stochastic is approaching the 20 region.
Should bearish dynamics dominate in the very short-term, the market might revisit the 140.18 inside swing high before meeting the 20-day SMA at 139.85. Below that, the area around the 40-day SMA at 138.11 and the 200-day SMA at 137.30, which overlaps with the uptrend line, could be another potential area in focus. Steeper decreases below the diagonal line could hit the 136.60 support, which stands inside the Ichimoku cloud, and open the way for a neutral bias.
Alternatively, if the price manages to rebound above the rising trend line resistance could come from the latest high of 142.70. Further up, the pair could rest around the 144.95 barrier, taken from the peak on February 21. A decisive close above the latter would increase speculation that an uptrend is in progress, touching the 147.00 handle registered on April 2019.
To summarize, GBPJPY’s bias looks positive both in the short- and the medium-term despite the downfall from the six-month high this week.
