GBPJPY has experienced significant moves in the short term, with the price losing around 11% before recovering back to form a fresh 6½-year high of 170.59. In the last couple of sessions, the pair has been trading sideways, but a break to the upside seems to be a matter of time as positive momentum is strengthening.
The short-term oscillators currently endorse a positive near-term bias. Specifically, the RSI is hovering above its 50-neutral mark, while the MACD histogram is strengthening above its red signal line in the positive territory.
Should the buying interest intensify, the pair could challenge the 6½-year peak of 170.59. Conquering this barricade, the price would edge higher to form fresh multi-year highs, where the crucial 2014 resistance region of 173.50 could curb further advances. Even higher, the spotlight may turn to the April 2015 peak of 175.00.
To the downside, if the positive momentum wanes and the price drifts lower, the recent support of 167.50 might act as the first line of defence. Sliding beneath that floor, the bears could aim for 165.00 before the 162.30 hurdle comes under examination. A break below the latter may set the stage for the October low of 159.70.
Overall, GBPJPY has been trading within a tight range after its latest advance paused, but near-term risks remain tilted to the upside. Therefore, a close above its latest multi-year peak is needed to verify the continuation of the uptrend.