GBPJPY rotated from a flash drop to a two-week low of 161.44 early on Thursday, hoping for a close above the March support trendline at 162.25 ahead of the Bank of England’s rate decision.
Despite today’s rosy upturn, the market seems to lack buying confidence as the RSI keeps flattening marginally below its 50 neutral level and the MACD is gradually decelerating towards zero.
The upper boundary of the bearish channel, which resumed its resistance role last Friday, is currently cooling upside pressures around 163.55. Stepping above that border, the bulls could progress towards the 164.50 restrictive zone, a break of which could motivate a quick advance towards the key 166.90 barricade.
On the downside, the March support trendline will remain in the limelight at 162.25. If sellers preserve power below it, the pair may seek shelter somewhere between the 160.70 handle and the 200-day SMA at 160.30. Failure to pivot here could prompt a freefall towards the lower boundary of the bearish channel seen around 158.60.
In brief, GBPJPY continues to look insecure despite today’s recovery mood. A sustainable move above the 163.55 – 164.50 zone could reduce downside risks. Alternatively, a decisive close below 162.25 could give the lead back to the bears.