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Technical Analysis – GBPJPY is ready to re-challenge 16-year high

  • GBPJPY rebounds off 198.90

  • Stochastics and RSI show positive signals

GBPJPY is heading upwards again after the selling interest in the previous week and the bounce off the 198.90 support level. The market is ready to test the 16-year high of 201.64, while even higher the 261.8% Fibonacci extension level of the down leg from 188.65 to 178.80 at 204.70 may halt bullish movements. However, traders need to be cautious at the next psychological levels as well, as at 202.00 and 203.00.

The technical oscillators are confirming the upside momentum of the market. The RSI is rising above the neutral threshold of 50, while the stochastic oscillator posted a bullish crossover within its %K and %D lines, approaching the overbought region.

In the negative scenario, a slide beneath the 20-day simple moving average (SMA), which stands around the 200.00 round number, cause the price to challenge the 198.90 support ahead of the 197.17 bar and the 50-day SMA 196.90. A successful plunge beneath the medium-term uptrend line could drive the bears until the 161.8% Fibonacci extension at 194.80.

To sum up, GBPJPY is strongly bullish in the short- and medium-term timeframes unless there is break below the 200-day SMA at 188.75 that would switch the bias to bearish.

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