GBPJPY proved once again unable to pierce the long-term resistance line despite its quick rally, topping instead at 153.39 before plunging back below the 150.00 level.
Downside risks keep lingering in the background according to the RSI and the Stochastics, as the former has slipped below its 50 neutral mark and the latter has yet to post a bullish cross below its 80 oversold level.
Yet, a bounce higher cannot be ruled out in the short term, as the price is approaching the 50-day simple moving average (SMA), the 23.6% Fibonacci retracement of the 133.00 – 152.53 up leg at 148.57, and the lower bar of the bullish channel. The lower Bollinger band is also in this neighborhood, further increasing the case for a rebound.
Should the bears drive below the channel, the 147.47 number may act as immediate support as it did in February. Beneath that, a sharper decline could develop towards the 38.2% Fibonacci of 145.62 and the bottom of the Ichimoku cloud.
In the event of an upside reversal, the 20-day SMA (middle Bollinger band) around 151.30 may attempt to block the way towards the 152.50 barrier. Moving higher, the bulls would push harder to breach the tough resistance line around 153.75.
Summarizing, GBPJPY seems to be exposed to additional downside corrections, with the selling pressure expected to lose steam as the price approaches a crucial support region.
