GBP/JPY has plunged sharply lower since Wednesday, almost reaching a two-month low near the 150.00 strong psychological level. Meanwhile, the price has been developing within an upward sloping channel since September, while in the short term technical indicators support a bearish picture.
From the technical point of view, the market could increase negative momentum in the short term. The Relative Strength Index (RSI) is sloping down in the negative territory approaching the oversold area, while the MACD oscillator is holding in the bearish area and is on track to break below its signal line.
If price action remains negative, the next level to have in mind is the 149.40 support level. A slip below the aforementioned level could open the door for the key barrier of 149.00.
On the flip side, if the price creates a bullish movement, then the focus could shift to the upside towards the 23.6% Fibonacci retracement level around 151.60 of the up-leg from 135.50 to 156.60. If this level is breached, it could increase bullish pressure until the price touches the 154.00 psychological barrier.
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