GBPJPY has made a speedy recovery following last week’s freefall to a 1 ½-month low of 151.30, sending the price back above its simple moving averages (SMAs) in the four-hour chart and into the 154.00 area.
Having clearly crawled above the 61.8% Fibonacci retracement of the 156.06 – 151.30 down leg, the pair is currently eyeing the 155.00 level. Higher, the spotlight will immediately turn to the 3-year high of 156.06 as any significant violation here would give the green light for a test of the 2018 top of 156.59.
The technical oscillators are endorsing the above positive scenario as the RSI has stretched its upward pattern above its previous peaks within the bullish area, while the MACD is trying to gain ground above its zero and signal lines. Meanwhile, the Stochastics, although in overbought territory, have yet to confirm a downside reversal.
Nevertheless, should the bears take control, the 50- and 200-period SMAs could immediately block the way towards the 50% Fibonacci level of 153.68. The 38.2% and 23.6% Fibonacci levels at 153.11 and 152.42 respectively may deter steeper declines towards the previous low of 151.30.
In brief, GBPJPY has resumed a bullish bias after its fast rebound from a 1 ½-month low. The 155.00 number is currently the target on the upside, while in the case of a downside reversal, the 154.40 – 154.16 area is expected to provide some footing.