GBPJPY recently pivoted at the 133.03 mark and appears to have started what seems like a sideways market. The simple moving averages (SMAs) are somewhat converging, supporting this view. Additionally, the weakening negative charge within the Ichimoku lines and the cloud, are aiding a shift into a horizontal formation.
The short-term oscillators mixed signals also give the impression of undecided directional momentum. The MACD, in the negative region, is increasing above its red trigger line, while the RSI has deflected off the 50 threshold and is falling in bearish territory. Moreover, the stochastic oscillator is also promoting further losses in the price, with its %K line overlap out of the overbought zone.
If sellers steer downwards, initial support may occur at the red Tenkan-sen line at 135.00 ahead of the 134.44 level, that being the 50.0% Fibonacci retracement of the down leg from 144.94 to 124.00. Plunging underneath this, the key trough of 133.03 may attempt to halt a decline. Diving from here, the pair may meet the lows of 131.94 and 131.75 from June respectively, while steeper declines could shift the focus to the 130.66 barrier.
Otherwise, a sustained drive upwards would be needed to overcome the heavy resistance zone from the 100-day SMA at 136.10 until the 61.8% Fibo of 136.97. Surpassing this area involving also the 200-day SMA at 136.49 and the cloud’s lower band, the price may hit the 50-day SMA at 137.74, which has fused with the blue Kijun-sen line. Directly above the flat 50-day SMA, buyers may face the 138.34 high. Further gains in the pair may then target the 76.4% Fibo at 140.00.
In brief, a neutral form seems to be developing in the pair. A break above 138.34 or below 133.03 could indicate the next price move.
