GBPJPY started the day in bullish territory and surpassed the 20-simple moving average (SMA) in the 4-hour chart. The pair has finally reversed to the upside in the near-term, however, it is still developing within a downtrend in the medium-term picture.
Momentum indicators in the 4-hour chart though are currently supporting that positive momentum is likely to weaken in the short-term. Specifically, the RSI is flattening above 50 and the MACD continues to distance itself above its red signal line in the bearish area. Moreover, the stochastic oscillator is turning lower in the overbought zone, suggesting a possible bearish movement.
Should the market continue the bullish bias, resistance could be met at the 23.6% Fibonacci retracement level of the downleg from153.80 to 143.20, around 145.70. If there is a jump above this region the next major resistance would come from the 146.20, which stands near the falling trend line.
To the downside, immediate support is being provided by the 143.75 hurdle. Further losses could push the pair towards the 143.20 key level, taken from the low on May 29.
The downward pattern that started in mid-April, however, may not change unless the market manages to crawl substantially above the descending line.
