GBP/JPY is set to end the week with a third consecutive small drop below July’s seven-and-a-half-year high of 184.00.
Market sentiment weakened this week. Price fell on its toes to test its lower band. 1 month old range At 179.80, it broke the 2023 resistance trendline after rejecting near the 20-day Simple Moving Average (SMA).
of Short-term bias neutral to bearish This is because the RSI is solidifying its downtrend around 50 and the MACD is slowing below the red signal line.
if 179.80 If the floor breaks, a negative correction towards the 50-day SMA is possible. 178.00. Several trendlines are in the region, including the support trendline from March. Although slightly lower, it may be interesting to note that the constraint line connecting April and October 2022 highs is at 177.20. If the selling side prevails there, the pace of the decline could accelerate towards the 175.00-174.60 zone.
On the upside, the bulls will need to do some extra homework to break out of the restrictive 20-day SMA. 182.00. If the effort succeeds, the price could jump to the 184.00 high or slightly above to test the long-term resistance line from May 2021. Claiming that territory, the focus would shift to the 186.00 round level where the pair faced some limits in 2015-14. If the buyer wants to go further up, the next stumbling block may occur for him in the 187.35-188.35 range and for him around 190.00.
In summary, GBP/JPY is still in a neutral stage in the short term and traders are waiting for a move below 179.80 or above 182.00 to move the market accordingly.