GBPJPY has been quite neutral this week, tiptoeing sideways, below the 157 level, but the market action continues to take place above the 20-day simple moving average (SMA) and the upper bullish Bollinger area, suggesting buyers are still eager to move.
Although lacking direction, the RSI is fluctuating above its 50 neutral mark and the MACD is flattening above its red signal line, while the green %K Stochastic line has drifted back above the red %D line, all keeping the bias tilted to the upside.
A decisive close above the 157.75 – 158.20 ceiling is now required to attract new buyers into the market, and hence clear the way towards the 160 psychological level. Running higher, the price could hit a wall around the early 2016 limitations at 163.85.If that proves an easy obstacle, the ascent could stretch towards the next resistance of 166.00.
On the downside, a step below the nearby support of 155.68, which coincides with the 23.6% Fibonacci retracement of the 148.96 – 157.75 upleg, could send the price towards the 38.2% Fibonacci of 154.40 unless the 50-day SMA rejects the bears beforehand. Should downside pressures intensify, the 200-day SMA and the 50% Fibonacci of 153.35 may attempt to catch the fall ahead of the crucial ascending trendine drawn from the 2020 lows, currently sitting at 152.40. Otherwise, the spotlight will turn to the 61.8% Fibonacci of 151.74, where any violation may navigate the pair straight to the 148.96 low.
In brief, GBPJPY has the potential to revive its bullish momentum after a period of consolidation, though only a sustainable extension above the 157.75 – 158.20 boundary could add fresh bullish fuel to the market.
