GBPJPY has recently pulled back from its 16-year peak of 208.10, signaling a shift in momentum. The pair has fallen to its lowest level since May 16, indicating a potential correction in the market. Both the RSI and MACD indicators are warning of an overstretched retreat, suggesting that bearish pressure may continue in the short term.
GBPJPY has been on an uptrend since early 2024, reaching a 16-year high on July 11. However, the recent pullback has violated both the supportive trendline established since January and the 50-day SMA. This breach of key technical levels points to further downside potential in the pair.
In the event that bears push the price lower, the June low of 197.18 will be the initial support level to watch. If broken, attention will shift to the two-month bottom of 195.84, followed by the March resistance of 193.52. Further declines could find a floor at the psychological level of 190.00, which acted as strong support in April.
On the other hand, if the price rebounds, the April peak of 200.50 will provide resistance for the bulls. Breaking above this level could pave the way for a move towards 202.08 before encountering the July resistance of 205.77. A breach of this resistance may set the stage for a retest of the 16-year high at 208.10.
GBPJPY is currently undergoing a correction from its recent multi-year high, with technical indicators pointing to further downside potential. While the breach of key support levels has darkened the technical picture, bearish traders should remain cautious as short-term oscillators are signaling overbought conditions. As such, traders should closely monitor price levels and technical indicators for potential trading opportunities in GBPJPY.
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