GBP/JPY Price Analysis: Uptrend fades as a dragonfly doji surfaces in the daily chart

GBP/JPY barely advanced as the Asian session began after Monday’s rally challenged resistance but failed to capitalize on an upbeat sentiment. At the time of writing, the GBP/JPY exchanges hand at 164.32, consolidating within a 180-pip range.

GBP/JPY Price action

In the last few days, the GBP/JPY price action printed back-to-back candles that portray the uptrend are fading. Last Friday’s, an inverted hammer, followed by a dragonfly doji, depicts indecision amongst the GBP/JPY traders. Additionally, a four-month-old resistance trendline that passes around the 164.30-50 area capped any upward moves, suggesting that a pullback could be underway.

Oscillators like the Relative Strength Index (RSI) at bullish territory turned flat as buying pressure faded. The Rate of Change (RoC), turned neutral, opening the door for a retracement.

Should a bearish scenario arise, the GBP/JPY could pivot toward the 20-day Exponential Moving Average (EMA) at 162.53 before challenging the 100-day EMA At 162.20. A breach of the latter will expose the 50-day EMA at 162.03 before testing the 200-day EMA at 161.98.

For a bullish resumption, the GBP/JPY must crack 164.50, which, once cleared, and the pair would be heading to test two-month highs at 166.00. On further strength, the next upside target to keep in mind would be the December 13 daily high at 169.27.

GBP/JPY Daily chart

GBP/JPY Technical level