FxWirePro: GBP/JPY may drag rallies upto next stiff resistance upon bullish DMA crossover, major downtrend still remains intact

GBP was an outperformer again today, cable rising to 1.2655 (+0.10%), its highest levels since mid-Dec 2016. While the upswings of GBPJPY has extended from yesterday’s close at 143.065 to the current 143.422 levels.

Amid this journey bulls have managed to break a resistance of 143.240 (pivot point), for now, the substance above this region indicates the extension of rallies up to next resistance (i.e. 147.431) seems to be most likely.

From last two weeks the pair has been bouncing northwards that’s now has gone beyond 7&21DMAs. 7DMA is now attempting to crossover 21DMA which is a bullish crossover.

But in the recent past, it has rejected the stiff resistances at 147.431 levels to push below 7SMA curves and up to the support of 142.392 levels.

Thereafter, bulls have managed to bounce back with bullish SMA crossover, but it has again rejected at the same 144.662 levels on last Friday (see 4H chart). For now, even though bulls struggling for momentum the upswings likely to drag towards 144.662.

Buying momentum on daily terms is intensified as we can make out from the leading oscillators (both RSI and stochastic curves) clearly converging to the prevailing rising prices.

MACD, on the other hand, signals the extension of its upswings.

On the contrary, these indications on monthly terms have been indecisive; RSI signals the struggle for strength in the previous month’s rallies.

The same has been the case on stochastic curves, this oscillator near oversold territory attempting for %k crossover but bears are attempting to regain selling momentum.

We are not isolating this signal, both leading oscillators indicate the struggling momentum.

The current prices on monthly terms remained way below 21EMA, and the major trend still seems to be in bears favor despite the attempts of recovery.

Thus, one can speculate bullish rallies but certainly not yet an investment opportunities in GBP.