GBP/JPY in consolidation phase near a five-month high [Video]

GBP/JPY is stuck between the 200-day simple moving average (SMA) and the 140.70 resistance, which is also the 61.8% Fibonacci of the downleg from 149.47 to 126.53.

Downside pressures seem to be strengthening as the RSI is heading down to meet its 50 neutral mark and the MACD continues to slip under its red signal line in the positive area.

The bears, though, need to drive under the 38.2% Fibonacci of 135.50, where the price previously topped, to bring into question the upward pattern that started from the 3-year low of 126.53. Such a move would also shift the medium-term picture from positive to neutral. Yet, this might not be easy as the area between the 200-day SMA and the 50% Fibonacci of 138.00 as well as the 136.50 barrier could reject any downside correction.

On the upside, the bullish action could gain new legs if the market spikes above the 140.70 resistance and the five-month high of 141.47. Moving higher, the 143.70 number could be another tough obstacle before all the attention turns to the descending trendline drawn from the 2018 high of 156.69, a break of which could trigger fresh buying, possibly sending the price up to 146.50.

In brief, GBPJPY is likely to remain under pressure in the short-term according to the falling technical indicators. However, to bring the market’s upward direction into doubt and downgrade the positive medium-term outlook, a sharper sell-off below 135.50 is required.