GBPJPY had been slowly gaining ground in the past three weeks, trading above its 50-day simple moving average (SMA) and recording continuous higher highs. However, in the past two sessions the pair has come under significant downside pressure, with its slump coming to a halt for now at the lower Bollinger band.
The momentum indicators are reflecting a negative near-term tone. Specifically, the stochastic oscillator is falling after posting a bearish cross, while the RSI is descending steeply below its 50-neutral mark.
Should selling interest intensify further, the recent low of 168.38 could provide initial support. If that floor collapses, the bears might aim for the 158.05 barrier before the May low of 155.58 appears on the radar. Any further price declines could then stall at the March low of 151.00.
On the flipside, if buyers re-emerge and push the price higher, the 50-day SMA, currently at 164.00, could act as immediate resistance. Piercing thought that zone, the price could ascend to challenge the 166.30 region. An upside violation of the latter may open the door for the 6-year high of 168.70.
Overall, GBPJPY’s short-term picture seems to be deteriorating but it has not turned bearish yet. Nevertheless, a clear jump above the 50-day SMA could signal the resumption of the pair’s latest rebound.
