GBP/USD under bullish control, EUR/JPY retreats sharply [Video]

GBP/USD under bullish control but confirmation required

GBPUSD closed marginally above its 50-day simple moving average (SMA) on Monday at 1.2244 for the first time since February, violating at the same time the upper surface of a bearish channel.

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Despite today’s stabilization, there are still hopes for further progress given the upward trend in the RSI, which is currently hovering clearly above its 50 neutral mark, as well as the strength in the MACD, which has climbed into the positive region.

That said, traders may wait for additional winning sessions, and particularly a durable move above the nearby resistance area of 1.2312 – 1.2400, before they target May’s top of 1.2665. If the bulls successfully claim the latter, officially signaling a trend reversal, the price could pick up steam towards the 1.2843 minor barrier, which was more active during the 2019 – 2020 period. Higher, the pair will seek another advance above the key 200-day SMA at 1.2960.

In the case the price pulls back into the bearish channel, the 1.2060 – 1.2000 region may attempt to prevent a freefall towards the 28-month low of 1.1758. Failure to change direction here could press the price towards the channel’s bottom line currently seen at 1.1640, while even lower, all attention will turn to the pandemic trough of 1.1408.

In summary, GBPUSD is still surrounded by positive vibes following its latest bullish breakout. Buyers will next look for a close above the 1.2312 – 1.2400 zone before they raise exposure in the market.

EUR/JPY retreats sharply, eyeing 200-day SMA

EURJPY has been experiencing a decline in the last few daily sessions after its latest advance paused at the 142.30 region.  Moreover, the price is currently trading below its lower Bollinger band and is battling with the crucial 200-day simple moving average (SMA), a violation of which could accelerate the downfall.

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The short-term oscillators suggest that negative momentum is strengthening. Specifically, the MACD histogram is losing ground beneath both zero and its red signal line, while the RSI is approaching the 30-oversold area.

Should selling pressure intensify further, the 200-day SMA, currently at 133.60, could act as the first line of defence. Sliding beneath that floor, the price may descend towards the May low of 132.64 before it challenges the 131.60 barrier. Failing to halt there, the bears could then aim for 127.45.

To the upside, if buyers re-emerge and reverse the drop, initial resistance could be encountered at the inside swing low of 136.85. Breaching this ceiling, the spotlight could then turn to the 140.00 psychological mark before the focus shifts to the recent reversal point of 142.30. A jump above the latter might set the stage for the 7½-year high of 144.27.

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