GBPJPY: 200-SMA again challenges buyers amid sluggish start to the key week
GBPJPY reached a one-month high but then pulled back from the 200-day moving average (SMA) as traders get ready for important news this week, including PMIs and the US jobs report. The US and Canadian Labor Day holidays are allow the cross-currency pair to consolidate the previous weekly gains, especially amid the cautious mood in the market.
GBPJPY buyers slowly tighten their grip…
Although the 200-SMA has been restricting the GBPJPY pair’s upside momentum since mid-July, a higher low formation in the last fortnight signals that the buyers are gradually winning over. Also, the bullish MACD signals and upbeat RSI conditions add strength to the upside bias.
Key technical levels to watch…
Given the 200-SMA’s repeated attempts to stall the GBPJPY upside, the buyers are advised to wait for a daily break past the key moving average, around 192.25, to take fresh long positions. Following that, the 50% and 38.2% Fibonacci retracement level of the quote’s December 2023 to July 2024 upside, respectively near 193.30 and 196.75, will lure the bulls. It’s worth noting, however, that a seven-month-old previous support line, close to 199.00, quickly followed by the 200.00 psychological magnet, could test the upside momentum.
Meanwhile, a drop below the immediate rising support line at about 190.70 could lead to further declines. Next support levels are around 190.00 and 188.00, with potential further drops to 184.80 and 182.50 before reaching a new yearly low around 180.10.
Looking ahead…
With the US and Canadian holidays and upcoming key economic data, GBPJPY might stabilize in the short term. However, if the market reacts negatively to the data, the bullish trend could be challenged.
