GBPJPY has been stuck in a prolonged uptrend since the beginning of the year, generating a structure of consecutive multi-year highs. In the near-term, the price seems to be consolidating near the 7½-year high of 183.74, appearing to be unable to extend its rally.
The momentum indicators currently suggest that bullish forces are waning. Specifically, the MACD dropped below its red trigger line but remains positive, while the stochastic oscillator is descending after exiting its oversold zone.
Should buying pressures fade and the price reverse lower, the recent support of 179.65 could act as the first line of defense. If that barricade fails, the spotlight could turn to 176.47 before the June low of 172.60 gets tested. Breaking below the latter, the pair could then face the May support of 171.20.
Alternatively, if the pair resumes its advance, the 7½-year high of 183.74 could prove to be the first hurdle for buyers to clear. Breaking above that wall, the price could ascend to post fresh multi-year highs, where the March 2015 peak of 185.00 could cap its upside. A violation of that zone could trigger a rally towards the November 2015 high of 188.79.
In brief, GBPJPY is consolidating near its multi-year highs as positive momentum seems to be fading. Therefore, the pair could adopt a sideways pattern or even experience a pullback before the bulls try to push the price higher.