Mon, Mar 27, 2023 @ 16:04 GMT
HomeContributorsTechnical AnalysisGBPJPY Finds Support But Lacks Bullish Confidence

GBPJPY Finds Support But Lacks Bullish Confidence

GBPJPY pinned a new two-month high of 163.74 near the 200-day simple moving average (SMA) earlier this week before easing slightly below the 162.00 level.

The pair is currently trying to set a foothold near the former resistance of 161.70, which overlaps with the 38.2% Fibonacci retracement of the 172.10-155.34 downleg and the 50-period SMA in the four-hour chart.

The technical picture, however, suggests that the market is not ready for a meaningful rally yet. Specifically, the RSI has given up significant ground within the bullish area and the MACD has shifted to the sidelines above its red signal line, while the Stochastic oscillator has pulled below its 80 overbought level, showing falling buying pressures.

Another bearish extension could initially stabilize near the 20- and 50-day SMAs at 160.40 before pushing towards the 23.6% Fibonacci of 159.30 and the bottom of the short-term bullish channel seen around 159.00. A breakdown at this point would dampen sentiment, likely activating a sharper decline towards the 157.20 barrier.

Alternatively, a bounce on the 161.70 base could stage another battle with the 200-day SMA at 163.40. The channel’s upper boundary, the 50% Fibonacci level, and the tentative resistance trendline drawn from October’s 6-year high are in the neighborhood as well, casting doubt on whether the pair will extend its recovery towards the 61.8% Fibonacci of 166.75  and the 167.00 region.

In a nutshell, GBPJPY is looking bullish-to-neutral in the short-term picture. A decisive rally above 164.00 is required to boost buying confidence in the market. Otherwise, a close below 161.70 is expected to extend the latest pullback towards the channel’s lower boundary.
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading