- GBPJPY staged a goodish rebound from the 133.00 resistance-turned-support zone.
- The attempted recovery move seemed struggling to find acceptance above 200-DMA.
- Subsequent move up runs the risk of fizzling out near the 138.80-85 support breakpoint.
- Weakness back below the 135.00 handle should pave the way for additional weakness.
It's Throwback Thursday and time to revisit our bearish GBPJPY call initiated on September 11. The pair extended the rising wedge breakdown momentum and dropped to near three-month lows before staging a goodish rebound from the 133.00 handle, marking a descending trend-line resistance breakpoint. The subsequent move up pushed the pair back above the 137.00 level, though struggled to find acceptance above the very important 200-day SMA.
Meanwhile, technical indicators on the daily chart have recovered from the bearish territory but are yet to confirm a bullish bias. The set-up warrants caution for bullish traders and positioning for any further near-term appreciating move. That said, some follow-through strength beyond the 137.45-50 region has the potential to push the pair beyond the 138.00 handle, towards testing the rising wedge breakdown point, now turned resistance near the 138.80-85 congestion zone.
On the flip side, immediate support is pegged near the 135.85 horizontal level and is followed by the key 135.00 psychological mark. Failure to defend the mentioned levels might turn the pair vulnerable to slide back towards challenging the 133.00 resistance-turned-support. A convincing break below will be seen as a fresh trigger for bearish traders and pave the way for additional weakness.