GBP/JPY surpasses 200-day SMA in descending channel [Video]

Melina Deltas, CFTe XM

GBPJPY is advancing above the 200-day simple moving averages (SMAs) and the 23.6% Fibonacci retracement level of the up leg from 129.30 to 156.06 t 149.75, remaining in a medium-term downward sloping channel.

Regarding the technical indicators, the stochastic oscillator is turning upwards after the bullish crossover within the %K and %D lines in the oversold territory, suggesting a positive bias. Moreover, the RSI is rising in the positive region, following the rebound off the 30 level.

A break above the Ichimoku cloud and the return line of the channel would ease the downside pressure, while a climb above the 152.80-153.40 could help turn the medium-term bias to a bullish one.

If the bears take the upper hand again and the price drifts below the 23.6% Fibonacci, that could bring into play the 148.45-148.90 zone and the 38.2% Fibonacci of 148.85. More declines could take the market until the 50.0% Fibonacci of 142.70.

Overall, GBPJPY has been in a descending channel since May 27; however, a rise above the 40-month high of 156.06 could switch the outlook to positive.

Author

Melina Deltas, CFTe

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups.

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