GBP/JPY: The uptrend is likely on its last legs – DBS Bank

GBP/JPY is back having a peep at the late-May’s high of 156.07. While the cross has moved higher, the MACD signal on the weekly chart is displaying divergent signals. This suggests we are likely pursuing the finale leg higher, Benjamin Wong, Strategist at DBS Bank, reports.

The tail-end of a bull run 

“The monthly chart shows GBP/JPY is nearing the 50% Fibonacci retracement of the 195.88-121.61 range grip that covers the 23.7% drop from 195.88 at 158.74. This is, at the same time, a key resistance offered at the Ichimoku cloud resistance.”

“The weekly chart’s moving average convergence divergence (MACD) signal is showing a bearish divergence despite GBP/JPY’s recent push higher from 148.47. This signal remains under the cosh, unable to validate this ongoing rally. This provides a cue or two that GBP/JPY will correct lower.”

“On our recent bullish endeavours, we have been guided by the 40-week moving average. Should the cross drop under this mark (currently 150.90), GBP/JPY will find additional bearish pressures. A fully stretched move typically tries to hover towards 148.47.”