GBPJPY is consolidating gains made after reaching a high of 152.85 yesterday, the highest level since June 2016. The chances for a push higher have diminished since the market became overbought at this level. This was indicated by the RSI rising above 70 on the 4-hour chart. Consequently, prices turned back down as upside momentum faded.
In the near term, GBPJPY is expected to see some choppy trading and will likely trade in a range below the 152.85 high, with support at 151.47, which is a resistance-turned-support level and also where the Kijun-sen line is located. Slipping below this support would turn the focus towards 150.00, a level which has been respected since September 15. A break below this support would bring more weakness to the market and open the way towards 146.80 (which was tested as both support and resistance in the past). Under this level, 143.00 comes into view ahead of 140.00.
Based on Ichimoku cloud analysis, the overall picture is bullish as the market is above the cloud while the Tenkan-sen and Kijun-sen lines are positively aligned. Other trend indicators are also bullish, as the 20 and 50-period moving averages are rising. The 152.85 high is a strong hurdle to overcome but clearing this level would see a resumption of the uptrend that started from the 140.00 area.
