HomeContributorsTechnical AnalysisGBPJPY Extends Sideways Pattern Below 50-day SMA

GBPJPY Extends Sideways Pattern Below 50-day SMA

  • GBPJPY rebounded strongly from a 3-month low
  • Gets stuck in a range after the 50-day SMA curbs advance
  • RSI and MACD are hovering around their neutral regions

GBPJPY had been in a prolonged uptrend since January, posting an eight-year high of 186.75 on August 22 before experiencing a pullback. Even though the pair staged a solid recovery, it has been rangebound for the past two weeks, with the narrowing Bollinger Bands hinting at low volatility ahead.

Should the price march higher and reclaim its 50-day simple moving average (SMA), immediate resistance could be met at the July high of 184.00, which also acted as a strong ceiling in October. Piercing through that wall, the pair could revisit its eight-year high of 186.75. If that hurdle also fails, the price could post fresh multi-year highs, where the 190.00 psychological mark might curb further advances.

On the flipside, should selling interest intensify, the bears could initially attack the 180.72 support zone. Even lower, the pair might challenge the 179.45 hurdle, which held strong both in July and October. Breaking below that level, the price could descend towards the October bottom of 178.05.

In brief, GBPJPY has been directionless for the past two weeks as the short-term oscillators continue to reflect a neutral tone. Hence, a break above the 50-day SMA is needed to shift the outlook back to positive.

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