GBPJPY is capped by the descending line at 150.50, which has been hindering market actions since mid-May, questioning the oversold signals coming from the RSI and the Stochastics. 

Since the last attempt to break out of the channel down pattern, the GBP/JPY rate has been trading in limbo around the 150.50 mark. Initially, it might appear that the rate is trading sideways. However, an in-depth look reveals that the pair has been forming a minor triangle pattern. Namely, the range of trading is decreasing until either buyers or sellers would take over and cause a break out in the form of a sharp move either up or down.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Even though the aforementioned indicators seem to have set up a foothold within the oversold territory, the bulls will need to successfully overcome the 150.50 bar in order to deviate above the two-month low of 149.47 and advance towards the 23.6% Fibonacci level of the latest downleg at 151.53. Then, a decisive close above the 152.60 barrier, where the 20- and 50-day simple moving averages (SMAs) are currently intersecting the broken long-term ascending trendline, could be a bigger achievement and an incentive to reach the 50-day SMA and the 50% Fibonacci of 153.84.

Alternatively, a downside reversal cannot be ruled out given the persisting negative momentum in the MACD. Therefore, if the 150.50 resistance stands firm, the price could drift lower to encounter its recent low of 149.47 before tumbling towards July’s support of 148.45. If the latter fails to cease selling pressures, the next stop could be around 147.40 taken from February’s limits.

GBPJPY Retraces From Early October Lows

Dec 05 2021

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