GBPJPY has been on the sidelines since mid-December but has been refusing to enter the Ichimoku cloud, with the RSI and the MACD suggesting that the indecisive mood may stretch into the short-term as both indicators appear muted near their neutral levels.
The pair, however, also seems to be well supported by an ascending trendline drawn from the 3-year low of 126.53 and any decisive close below it could initiate fresh selling pressure, probably towards the 140.70 restrictive level, which is also the 61.8% Fibonacci of the 149.47-126.53 downleg. Slightly lower, the 139.40 handle paused downside corrections in the October-November period and will be closely watched, while beneath that, the 50% Fibonacci of 138.00 and the 200-day simple moving average (SMA) could be the next target.
In case the bulls take control, the 146.00 and 147.00 numbers could stand tall as in previous sessions. If not, then the rally may extend to test the 148.86-149.47 strong resistance region, where any significant violation would shift the bigger picture from neutral to positive.
The rising 50-day SMA which has registered a golden cross with the 200-day SMA is an encouraging sign that the current uptrend may strengthen.
In brief, GBPJPY is expected to follow a sideways path in the short-term, with traders keeping a close eye on the ascending trendline for any steeper downfalls.