GBPJPY is resting on the upper surface of the Ichimoku cloud after progress in the pair touched a high of 140.28, before reversing below the 140.00 mark, which happens to be the 76.4% Fibonacci retracement of the down leg from 144.94 to 124.00. The horizontal cloud and the conflicting signals from the converged simple moving averages (SMAs) further reflect an aimless market.
The short-term oscillators are transmitting mixed clues in directional momentum. The MACD, in the positive region, is creeping higher above its red trigger line, while the RSI improves slightly ahead of the 50 threshold. However, the stochastic oscillator has adopted a bearish tone promoting more losses in the pair, with its %K lines’ dive below the 80 level.
To the downside, immediate support may come from the cloud’s upper band at 137.84 and the Ichimoku lines just beneath. Slipping back into the cloud, additional constraints to down moves may come from the 100-day SMA, currently located at the 61.8% Fibo of 136.96. Should extra weakening unfold, the pair could then meet the 50-day SMA at 136.26 and the cloud’s lower boundary, ahead of the 200-day SMA at 135.56 and the neighbouring low of 135.05. If steeper declines accelerate past the 50.0% Fibo of 134.51 and the 134.39 level, the 133.03 key trough may step into the spotlight to challenge the bears.
Yet, if buying interest increases, a push off the cloud may encounter initial resistance from the 76.4% Fibo of 140.00 until the 140.28 high. Overrunning this crucial limiting belt, the price may hit the 141.42 barrier before revisiting the six-month peak of 142.70. Overthrowing this too, buyers may gear up for the 143.71 mark from February 26.
Overall, GBPJPY sustains its sideways demeanour in the short-to-medium-term. The current neutral-to-bullish tone may develop with a break either above 140.28 or below the SMAs and the 134.39.
