GBP/JPY is retracing its recent gains, trading around 190.90 during the Asian session on Friday. Technical analysis reveals that the pair is testing the lower boundary of its ascending channel, suggesting a potential shift from its recent bullish momentum. The 14-day Relative Strength Index (RSI) is currently below 50, indicating bearish pressure.
Despite some short-term upward momentum, as reflected by the MACD (Moving Average Convergence Divergence) line being above the signal line, the MACD remains below the zero line, underscoring a prevailing bearish trend. This setup may signal a possible short-term recovery or upward movement within a broader downtrend.
Resistance is seen at the 21-day Exponential Moving Average (EMA) level of 191.63. A break above this level could bolster bullish sentiment and push GBP/JPY towards the upper boundary of the ascending channel at 195.50.
Conversely, if GBP/JPY breaks below the ascending channel, it could enhance the bearish outlook and drive the pair towards the seven-month low of 180.09, recorded on August 5. Additional support is anticipated around the 178.50 level.
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