GBP/JPY rebounds on 5-month lows; indicators signal bullish bias.
GBP/JPY is trading not too far from the five-month low of 136.55, having pulled back slightly. The momentum indicators suggest there is still some upside for the pair to advance again, despite the downward movement on the red Tenkan-Sen line.
The near-term bias is looking neutral-to-bullish as the RSI is flattening near the 30-oversold level, while the MACD oscillator is heading marginally up, above the trigger line. The stochastics are pointing north and the %K and %D lines remain positively aligned.
Should GBP/JPY make another run higher, it’s likely to meet resistance at 138.90, where the 20-day simple moving average is currently located. A successful break above this line would open the way for the 141.70 resistance and the 40-day SMA, around 141.85. After that, the price might challenge the 143.70 inside swing bottom, reached on March 29.
If the soft positive momentum fails to hold and prices turn lower, below the 136.55 support, the two-year low of 132.50 is the nearest support that could halt steeper declines.
The neutral-to-bearish picture holds for the medium-term outlook as the pair has been remaining below the short-term moving averages following the sharp bearish movement from the 147.00 level. Price action at the moment is below the Ichimoku cloud so the risks are to the downside.
Concluding, the price seems to be neutral-to-bullish in the short-term but neutral-to-bearish in the bigger profile.
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