GBP/JPY technical analysis: Retreats below SMAs after progress curbed by 50.0% Fibo

GBPJPY defied the 100-period simple moving average (SMA) at 135.87 but found some footing at the floor of the cloud. The sharp drop ahead of the 137.85 level, that being the 50.0% Fibonacci retracement of the down leg from 142.70 to 133.03, is weighing heavily on the cloud’s lower boundary. The negative tone within the declining Ichimoku lines endorses additional deterioration in the pair.

The short-term oscillators also reflect strengthening negative momentum. The MACD underneath its red signal line, is weakening below its zero mark, while the falling RSI is flirting with the 30 level. The 200- and 50-period SMAs have somewhat become neutral, while the gradual rise in the 100-period SMA adopts a slow course targeted to converge with its peers, possibly nudging the price into a sideways market.

Should sellers successfully push under the lower band of the cloud at 136.65, the price may hit the 23.6% Fibo of 135.31, before confronting the support section of 134.89 - 135.04. Dipping past this, the price may reach the 134.35 barrier, prior to challenging the 133.81 and 133.59 lows respectively. If previous levels fail to dismiss the decline, the pair may put pressure on the 132.93 to 133.03 base.  

Alternatively, if the pair manages to gain a foothold on the cloud’s lower edge and push over the 100-period SMA at 135.87, the ceiling of the cloud may prove to be the next deterrent to the upside. A step higher may encounter fortified resistance from the 38.2% Fibo of 136.73 - coupled with the Ichimoku lines - and the 50- and 200-period SMAs overhead, at 136.92 and 137.06 respectively. Conquering these tough obstacles, the pair may aim for the 50.0% Fibo of 137.85, before shooting for the 138.24 to 138.35 resistance zone.

Summarizing, should the cloud manage to rescue the pair from further losses, the pair may consolidate in the short-term picture around the 38.2% Fibo.