Technical analysis – GBP/JPY under pressure near 18-year high
|- GBPJPY faces resistance at multi-year highs.
- Upward-sloping channel intact for multiple months; supported by 20-day SMA.
- Momentum indicators signal fading positive bias in near term.
GBPJPY remains under pressure, pulling back from the 18-year high of 214.20 reached last week, as the yen strengthens against the pound. This comes even after better‑than‑expected UK retail sales data supported the pound, as the BoJ kept interest rates unchanged and maintained its hawkish inflation outlook.
Despite the pullback, the pair continues to trade above the key 20‑day simple moving average (SMA) and remains within an ascending trend channel that has been in place since early November. It also holds above the long‑term uptrend drawn from the April lows.
However, if the rejection from multi-year highs extends, initial support is expected at 212.10, which is near the 20‑day SMA. Below that, support lies at the monthly lows near 210.50, the 50‑day SMA around 209.00, and 206.80 – a break of which would shift the broader bias to neutral.
Conversely, if the overarching bullish momentum resumes, the next significant upside target stands at 215.87, corresponding to the swing high from July 20, 2008, followed by 217.00, before the pair ventures into territory last seen in 2007.
The momentum indicators support the fading bullish bias, with the RSI easing below the overbought territory and the MACD stretched to the upside but now retreating below its red signal line.
To sum up, GBPJPY is softening just below multi‑year highs. Traders should monitor key support levels for potential pullback opportunities and watch for sustained price action above the 20‑day SMA
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