Thursday, June 1, 2023

GBPJPY creates an encouraging setup near familiar support


commenced a soft turnaround at the surface of the Ichimoku cloud once again and crawled back above the 153.00 level, avoiding a trend deterioration below the previous low of 151.30.

Although clear bullish signals remain absent, the higher lows in the RSI and the Stochastics and the progressing bullish cross between the red Tenkan-sen and blue Kijun-sen lines are reflecting some improvement in buying appetite.

A step above the 20-day simple moving average (SMA) at 154.16 may retest the swing high of 155.14, a break of which is likely required to gain access to the 3 ½-year high of 156.06. Higher, traders would be interested to see whether the tough long-term resistance line can prompt another bearish round at 158.00. In the case it fails to act, the door will open for the key 160.00 number – a barrier to upside and downside movements during 2016.

On the downside, a drop below 151.30 is expected to boost selling interest, with the price likely accelerating the fall to seek support within the 149.00 – 148.50 region. A move lower would neutralize the medium-term picture, though the strong supportive trendline drawn from the 2020 March lows slightly beneath may attempt to keep the market in the long-term upward trajectory.
Summarizing, GBPJPY is holding a neutral bias in the short-term picture, though given the trend improvement in momentum indicators, upside corrections cannot be excluded.


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