GBP/JPY technical analysis: Vulnerable, maintains a horizontal tone

Anthony Charalambous, CFTe XM

GBPJPY has become fixed between the capping 50-day simple moving average (SMA) and the mostly flattened 100-day SMA after attempts to improve faltered. The pairs push above the 200-day SMA together with the shading Ichimoku cloud overhead, are further dampening an evolving direction. Moreover, the cloud and the steady Ichimoku lines, as well as the deteriorated bullish demeanour of the 50- and 100-day SMAs additionally endorse a directionless market.

At the moment the short-term oscillators display momentum that is far from effective. The MACD is barely above its red trigger line and the zero threshold, while the downward-pointing RSI continues flirting with its neutral mark. On the other hand, the positive charge in the stochastic oscillator looks fragile as the %K line has stalled ahead of the 80 level.

If selling interest increases, limitations could commence from the 100-day SMA merged with the red Tenkan-sen line at 136.60 and the 200-day SMA at 136.00 beneath. A dip underneath may encounter the support section of 135.04 - 135.36, where the blue Kijun-sen line also lies. Should losses extend past this zone and the 134.51 level, which is the 50.0% Fibonacci retracement of the down leg from 144.94 to 124.00, the pair may then challenge the 133.03 key trough. Failing to terminate the decline could highlight the region of lows of 131.94 and 131.75 from the end of June.

To the upside, immediate resistance may arise from the 50-day SMA at 137.36 and the nearby cloud’s ceiling at 137.87 ahead of the 138.34 high. Triumphing above these borders may shoot the price towards the 76.4% Fibo of 140.00. A persistent climb may then test the 141.42 barrier before hitting the 6-month peak of 142.70.

In the short-term picture GBPJPY seems to be edging into a sideways market as no directional signals are taking shape. A clear break below 133.03 or above 138.34 is expected to set the next course.

Author

Anthony Charalambous, CFTe

Anthony Charalambous joined XM in 2019 and specializes in preparing daily technical analysis, using his years of trading experience to provide detailed forecasting for all major asset classes such as forex, indices, commodities and equities.

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