GBPUSD has reversed back up after finding strong support at the 28-month low of 1.1760. The pair is advancing above the 20-day simple moving average (SMA) and the next obstacle to surpass is the medium-term descending trend line.
The momentum indicators are pointing to a positive bias in the short term with the RSI just above 50 and the MACD is holding above its trigger line in the negative region.
A move to the upside could see immediate resistance at the 40-day SMA at 1.2150 but should the market increase positive momentum above this area, the 23.6% Fibonacci retracement level of the down leg from 1.3640 to 1.1760 at 1.2200 could be the next level in focus. A stronger area, though, could be found at the 1.2340-1.2455 since any violation of this point could increase chances for further gains probably towards the 38.2% Fibonacci of 1.2470.
In the wake of negative pressures, the market could meet immediate support at the 20-day SMA at 1.1990 before it heads lower to the 1.1890 support. A successful close below this level could see a retest of the previous low of 1.1760, while in case of steeper declines, the pair could breach this trough, diving to the 1.1410 barrier, registered in March 2020.
In the medium-term, the outlook remains negative since prices hold below the falling trend line; however, in the short-term timeframe, the market is positive.
EURJPY has been experiencing a decline in the last few daily sessions after its latest advance paused at the 142.31 region. Although the pair managed to cease its drop, its upside remains capped by the congested region that includes its 50-day simple moving average (SMA) and the upper boundary of the Ichimoku cloud.
The momentum indicators suggest that negative momentum is strengthening. Specifically, the stochastic oscillator is sloping downwards near the 20-oversold area, while the RSI is hovering below its 50-neutral threshold.
Should selling pressure intensify further, the recent low of 138.70 could act as the first line of defence. Sliding beneath that floor, the price may descend towards the crucial 136.85 barrier before it challenges the May low of 132.64. Failing to halt there, the bears could then aim for the 131.60 hurdle.
To the upside, if buyers re-emerge and push the price above its 50-day SMA, immediate resistance could be encountered at the 140.68 region. Breaching this ceiling, the spotlight could then turn to the recent reversal point of 142.31. An upside violation of the latter might then set the stage for the 7½-year high of 144.27.
Overall, despite its recent weakness, EURJPY maintains its bullish technical picture. For that to alter, the price needs to decisively dive below the 136.85 floor.