Thu, Jun 08, 2023 @ 08:17 GMT
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GBPJPY’s Signals Warrant Some Caution

GBPJPY has been on the sidelines this week, unable to find fresh impetus to successfully climb above February’s bar of 164.30.

Despite the weekly neutral trajectory, the shooting star candlestick created on Tuesday is keeping bearish risks in sight, flagging a potential downturn. The double top pattern in the RSI is another discouraging signal, though with the indicator hovering above its 50 neutral mark and the MACD remaining elevated within the positive region, sell-side pressure could be constrained.

The 20-day exponential moving average (EMA) at 162.90  has been limiting market actions periodically since the start of the year, while not far below the 38.2% Fibonacci retracement level of the 172.10-155.34 downleg at 161.75 could be another key area to watch if selling interest grows further. Falling lower, the bears will aim for a channel breakout below 160.75. If they succeed, the door will open for the 23.6% Fibonacci level of 159.30.

Alternatively, a sustainable move above 164.30 would eliminate downside risks, shifting the attention back to the channel’s upper boundary seen between 166.75 and 167.00. Should the bulls strengthen above that threshold, the pair could advance straight up to the key resistance zone of 168.50-169.00. A decisive close higher could be a prerequisite for an extension to the 2022 peak of 172.10.

In brief. GBPJPY may stay in a cautious trading mode in the short term, unless the price overcomes the 164.30 barrier.
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