GBP/JPY bearish action slows, trend reversal awaited.
GBP/JPY continues to show signs of a fading downtrend as the RSI and the MACD keep extending their two-month-old upward pattern at a time when the price seems to be easing bearish momentum. The minimal difference between the recent lows is more evidence that the market may be preparing for a trend reversal.
Traders could wait for a clear breakout of the June high of 138.32 to confirm the end of the bearish movement. Before that, the bulls would need to overcome the 136.50 and 137.40 barriers.
Should the market finish a session comfortably under the 135.00 mark, the door could open for the short-term descending line drawn from the 136.54 level currently around 133.40. A violation of this line would turn the spotlight to the two-year low of 132.48 marked in early January.
Meanwhile, in the medium-term timeframe, GBP/JPY is in a negative mood as long as it holds below 143.70.
In brief, the short-term bias seems to be shifting to the upside, though only a decisive close above 143.70 would switch the negative status to neutral in the medium-term picture.
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