- GBP/JPY pares intraday gains as short-term moving average tests buyers.
- Downbeat MACD signals, the previous day’s bearish candlestick also tease sellers.
- Bears need validation from 50% Fibonacci retracement level to retake controls.
GBP/JPY retreats from the intraday high while consolidating the daily gains around 163.45 during Monday’s Asian session.
In doing so, the cross-currency pair justifies the previous day’s Doji candlestick, as well as bearish MACD signals, by taking a U-turn from the 21-DMA.
Other than the 21-DMA hurdle of 163.60, a horizontal area comprising multiple levels marked since late March also challenges the GBP/JPY buyers around 164.65-75.
Should the quote rise past-164.75, the odds of witnessing a run-up towards April’s peak of 168.43 can’t be ruled out.
On the flip side, the 160.00 threshold may entertain GBP/JPY bears ahead of directing them to the 50% Fibonacci retracement (Fibo.) of March-April upside, near 159.65.
It’s worth noting, however, that a daily closing below 159.65 will need validation from March’s low surrounding 159.00 before highlighting the 61.8% Fibo level of 157.59 for the pair sellers.
To sum up, GBP/JPY buyers seem exhausted but the bears have a long way before retaking the control.
GBP/JPY: Daily chart
Trend: Pullback expected
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