Technical Analysis – GBPJPY rests near 4½-month high; remains in bullish channel

Melina Deltas, XM Investment Research Desk

GBPJPY has been moving higher within an upward sloping channel over the last four months, remaining above the 20- and 40-day simple moving averages (SMAs).

The price reached a four-and-a-half-month peak around 142.40, however, the technical indicators are mixed. The MACD is moving horizontally in the positive territory, while the stochastic is turning slightly lower after the bullish crossover within the %K and %D lines.

An advance above the 142.40 resistance could take the pair towards the 144.95 barrier, registered in February 2020, shifting the bias to strongly bullish. More aggressive gains could retest the 147.95 hurdle, taken from the high in December 2019.

If the bears take control and the price retreats beneath the 20- and 40-day SMA, immediate support could come from the upper surface of the Ichimoku cloud at 139.10. Clearing this zone and the ascending channel could meet support at 136.85, which is near the 200-day SMA, switching the market to neutral. More losses could open the door for 134.40 and the 133.00 psychological level.

Overall, GBPJPY is positive in short- and long-term timeframes, despite the weak momentum of the technical indicators.