GBP/JPY Close to a New 2023 High as the Bears Appear Powerless
2023.08.11 07:14
is trading higher again today, registering its fifth consecutive green candle. The bears tried to take advantage of the July 28 events, but the bulls quickly took control of the market and never looked back. They are currently trying to make a new 8-year high despite the mixed momentum indicators’ picture.
In more detail,
the Average Directional Movement Index (ADX) remains uninterested in the current upleg as it continues to trade below its 25-threshold, and thus signaling a range-trading market. Additionally, the RSI is edging gradually higher but has failed, up to now, to record a higher high and support the current upleg in GBPJPY. More importantly, the stochastic oscillator has just entered its overbought territory. This is usually seen as an early rally exhaustion signal, but stronger confirmation is needed to energize the bears.
Should the bulls remain thirsty, they would try to test the resistance set by the February 26, 2015 high at 185.02. If successful, the path would then be clear until the next key level, the December 5, 2014 high at 189.70.
On the other hand, the bears are desperately trying to stage a pullback. They are keen on a move below the June 22, 2023 high at 182.54, and a retest of the busy 180.81-181.42 range populated by the April 9, 2001 high and the 50-day simple moving average (SMA). The door would then be wide open for a more sizeable sell-off as the next key support area resides in the 147.50-174.84 range.
To sum up, despite the mixed momentum indicators, GBPJPY bulls are again firmly in control as the bears appear unable to stage another sell-off similar to the July 27 drop.
