The GBPJPY pair has recently pulled back from its 16-year peak of 208.10, marking a significant shift in momentum. This retracement comes after months of sustained uptrend dating back to early 2024. The price has now fallen to its lowest level since May 16, signaling a potential change in trend direction.
Key Support and Resistance Levels
As the bears attempt to push the price lower, they will need to surpass the June low of 197.18 first. If this level is breached, the focus will then shift to the recent two-month bottom of 195.84. Should the pair continue to decline, the next key support level to watch is at 193.52, followed by the psychological mark of 190.00 which held strong in April.
On the other hand, if the price reverses and moves higher, the April peak of 200.50 will serve as the initial barrier for the bulls. Breaking above this level could pave the way for a potential move towards 202.08, with the ultimate target being the July resistance of 205.77. A breach of this resistance could open the door for a retest of the 16-year high of 208.10.
Technical Indicators Signal Caution
Both the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators are signaling an overstretched retreat in the GBPJPY pair. The break below the crucial ascending trendline has further clouded the technical picture, indicating a bearish bias in the near term.
While the short-term oscillators are flagging overbought conditions, traders should exercise caution when entering positions. The downside correction from the recent multi-year high suggests that further bearish momentum may be on the horizon. However, with key support and resistance levels in play, it remains to be seen if the bulls can regain control and push the price higher in the coming sessions.