GBPJPY is set to finish the week in the neutral zone for the first time after 13 consecutive green weeks, as the tough resistance around the upper boundary of the one-year-old bullish channel resurfaced on the way up.
Despite its muted tone, the price managed to unlock a 35-year high of 152.53 on Thursday and remain resilient above the red Tenkan-sen line, which has been assisting the bulls for more than three months now.
In momentum indicators, the RSI could not create a higher high above the double top in overbought territory, shifting northwards instead, while the MACD continued downhill after breaking below its signal line, both promoting more downside corrections in the short term.
That said, the bears may not win dominance unless they successfully breach the floor around the red Tenkan-sen at 151.53, in which case the 20-day simple moving average (SMA) could immediately catch the fall around 150.36. Slightly lower, the 149.68 barrier could next come into view before a more aggressive sell-off takes place till the bottom of the channel and the 147.47 handle.
In the positive scenario where the price rebounds off 151.53, the bulls may push harder to drift beyond the channel with scope to meet the 153.75 restrictive region last seen in late 2017 – early 2018. Higher, all attention will turn to the 2018 highs registered within the 155.60 – 156.59 zone.
Summing up, the short-term bias is looking neutral for GBPJPY in the short-term picture as long as the pair consolidates its rally between the 151.53 level and the surface of a long-term bullish channel. A violation of these boundaries could set the next direction in the market.
