GBP/JPY registered another lower low at its March down-leg slightly below the key support level of 135.79, but it soon bounced up again as the RSI signaled oversold conditions. The latter is currently moving with a positive slope towards its 50 neutral level, while the MACD continues to trend up above its red signal line, both suggesting some recovery in the short term.
The price, however, needs to overcome the 20-day simple moving average (SMA) and a former support region of 137.40 to somewhat boost confidence in the market. Buyers may find a rally above the previous high of 138.32 more convincing, consequently sending the price up to the 139.60 level.
In the negative scenario, the sell-off could sharpen if the bears clear the 135.79-135.36 zone, shifting the spotlight lower to 133.40, a congested area in 2016, and the 132.48 bottom.
Meanwhile, in the medium-term, GBP/JPY turned even more bearish after the extension of the March downtrend. With the 50-day SMA holding currently a steep negative slope under the 200-day SMA, hopes for a bull market are weakening.
In brief, the short-term bias is tilted to the upside, while the medium-term picture shows no sign of improvement yet.
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