- GBP/JPY hangs around multi-month top, recently bouncing off intraday low.
- Tuesday Doji suggests trend reversal, battles bullish MACD, ascending channel.
- 21-day, 50-day SMA confluence adds to the downside filters.
- Bulls can target 2018 yearly top on upside surprise.
GBP/JPY picks up bids around 153.65-70 but fails to regain upside traction during early Wednesday. The pair printed a Doji candlestick on the daily chart the previous day, suggesting a pullback, but bullish MACD tests the sellers ahead of the key UK data.
Read: UK GDP Preview: Contraction to trigger correction? Sterling set for a reality check
Hence, GBP/JPY traders should wait for either a clear break above 154.00, the highest since February 2018, or a sustained downside below April’s top surrounding 153.40.
Given the anticipated disappointment from the British data, GBP/JPY may justify Tuesday’s Doji to revisit the April-end top near 152.40. However, the quote’s further downside will be challenged by a convergence of 21-day and 50-day SMA near 151.20-35.
Even if the pair drops below 151.20, it needs to defy an 11-week-old rising channel bullish formation with a breakdown of 150.50 level to convince GBP/JPY bears.
On the flip side, a successful run-up beyond the 154.00 threshold, will attack the stated channel’s resistance line around 155.00 ahead of targeting the year 2018 tops close to 156.60.
GBP/JPY daily chart
Trend: Pullback expected
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