Momentum moving in favor of sellers
We’ve been seeing consolidation in GBP/JPY for several months now and it would appear that momentum is gradually turning in favor of sellers.
While the pair is seeing solid support around 148.50, the rallies are hitting a ceiling earlier and earlier which is typically a bearish signal.
With that support zone also now being intercepted by the 200/233-day SMA band, any breakout to the downside could be very significant.
While the ranges are tightening, there is potentially still plenty of consolidation to come before a breakout happens, with 153 looking like key resistance above.
It is worth keeping an eye on the Fibonacci levels during any rallies as a rotation off one of these may precede a run at the 148.50 support.
A move above the 61.8% retracement level would suggest the consolidation will go on and perhaps we’ll see a move back towards the highs of the range.
The 50 fib has already provided some resistance, coinciding with prior support.