- GBP/JPY picks up bids to reverse the previous day’s pullback from one-week high.
- Bullish MACD signals, sustained bounce off 21-SMA favor buyers.
- 200-SMA, five-week-old descending trend line challenge upside moves.
GBP/JPY picks up bids to print mild gains around 166.65 heading into Wednesday’s London open. In doing so, the cross-currency pair bounces off the 21-SMA to reverse the previous day’s losses from the one-week high.
The recovery moves also take clues from the bullish MACD signals to keep the GBP/JPY buyers hopeful.
However, a convergence of the 200-SMA and downward-sloping resistance line from the October-end, near 167.30, appears a tough nut to crack for the pair buyers.
In a case where the GBP/JPY crosses the 167.30 hurdle, a run-up towards the late November swing high near 169.00 and then to the 170.00 psychological magnet appears imminent.
It’s worth noting that the previous monthly peak surrounding 171.00 and October’s high around 172.15 could please the GBP/JPY buyers past 170.00.
Alternatively, pullback moves remain elusive beyond the 21-SMA support of 166.00.
Following that, an ascending trend line from November 11, close to 164.25 by the press time, could act as the last defense of the GBP/JPY buyers.
Should the cross-currency pair remains bearish past 164.25, and also break the 164.00 threshold, the odds of witnessing a slump toward October’s low near 159.70 can’t be ruled out.
GBP/JPY: Four-hour chart
Trend: Limited upside expected