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23/08/24
117
GBP/JPY Pullback: Market Faces Bearish Pressure Amid Channel Break Concerns
The GBP/JPY currency pair is currently experiencing a pullback, with trading occurring around the 190.90 level during the Asian session on Friday. Analysis of the daily chart reveals that the pair is attempting to slip below the lower boundary of its ascending channel. This technical move raises concerns about the sustainability of the recent bullish momentum.
The Relative Strength Index (RSI) has dipped below the neutral benchmark of 50, suggesting that bearish pressure is increasingly prevalent in the market. Despite some short-term upward momentum indicated by the Moving Average Convergence Divergence (MACD) line, which remains above the signal line, the overall trend is still categorized as bearish as the MACD line stays beneath the zero line. This presents a scenario where any upward movements might be temporary and could potentially unfold within a larger downward trend.
Resistance is immediately positioned at the 21-day Exponential Moving Average (EMA) level of 191.63. Should the pair manage to push past this resistance, it could bolster bullish sentiment and provide the momentum needed to reach higher levels, specifically the upper boundary of the ascending channel at approximately 195.50.
Conversely, a decisive breach beneath the ascending channel could trigger a more pronounced bearish trend, raising concerns about further declines. In such an event, the GBP/JPY could target a seven-month low of 180.09, a level struck on August 5. Additional support levels are identifiable at the 178.50 area, providing potential areas of interest for traders should the downward pressure persist.
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