GBP/JPY technical analysis: 131.30/35 becomes the tough nut to crack for buyers

GBP/JPY remains on the front foot after clearing 21-DMA amid bullish MACD.
23.6% Fibonacci retracement, three and a half month long falling trend-line limit the upside.

Anil Panchal FXStreet

While a sustained break of 21-day simple moving average (DMA) portrays the GBP/JPY pair’s weakness amid bullish MACD signal, the quote still remains below key resistance-confluence while trading near 130.00 during early Wednesday morning in Asia.

As a result, chances of the pair’s pullback to 21-DMA level of 129.20 can’t be denied. However, its further declines will be challenged by a two-week-old rising trend-line near 128.50.

In a case where prices keep trading southwards past-128.50, monthly bottom close to 126.50 gains sellers’ attention.

Should the bullish signal by the 12-bar moving average convergence and divergence (MACD) helps buyers to overcome 131.30/35 confluence, comprising 23.6% Fibonacci retracement of pair’s May-August downpour and a descending trend-line since early May, they can aim for July 30 high near 133.10 and July 17 bottom around 134.00 during further upside.

GBP/JPY daily chart

Trend: Pullback expected

1. R3 132.43
2. R2 131.29
3. R1 130.49
PP 129.35
1. S1 128.54
2. S2 127.4
3. S3 126.59

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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