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Summary: Despite a recent bullish breakout (right shoulder), the GBPJPY appears to maintain a subdued tone. A retracement may be in the cards, setting a solid foundation for further upward movement.

Fundamentals

The GBPJPY failed to benefit from its attempts to break above short-term resistance trendlines earlier this week and is currently holding below the 186.00 level. This reflects bearish momentum, indicating that the first resistance at 186.00 may see bearish reactions, potentially pushing prices down towards the first support at 184.64, where its significance as a pivotal swing low support will provide reinforcement. Furthermore, the second support at 184.22 is considered a retracement support at the 50% Fibonacci level.

On the resistance front, the first resistance at 185.96 is regarded as a multi-wave high resistance, and the second resistance at 186.67 is seen as a swing high resistance, both signaling key levels within the trading environment.

Regarding momentum indicators, the Relative Strength Index (RSI), while relatively weak, remains above the neutral 50 level. The MACD is still above the zero line and within the positive territory, indicating that recent buying interest remains active. However, with the stochastic oscillator looking for a bearish reversal near the overbought level of 80, there is uncertainty about whether there is enough bullish strength to push the price toward the August high at 186.45.

Meanwhile, the asset still has crucial levels below 186.00 that could resist selling pressure. Over the past two days, the 50-day SMA has been constraining the downside movement, situated at 182.67, while the uptrend lines since March at 181.65 and since April 2022 at 179.60 might also prevent further price declines.

If the bears take the lead, the asset could potentially plummet to the 175.85 area, which overlaps with the 38.2% Fibonacci retracement level of the range from 158.25 to 186.45 unless the 178.30 area quells selling impulses beforehand.

If the uptrend resumes above the eight-year high at 186.45, the bulls might pause near the November 2015 high at 188.80 before extending toward the critical resistance line from October 2022 at 190.50. Attention might also be drawn to the uptrend line breached in March from the same area. If it gives way, the door to the 195.30 upper limit from 2015 could open.

Overall, despite the recent breakout of the bullish trendline, GBPJPY bulls remain cautious. On the other hand, bears have been unable to sustain their positions as important support levels remain intact. A closing price above 183.55 or below 179.60 may offer the market its next directional cue.

Technical Analysis

The GBPJPY tends to maintain a neutral stance on an intraday basis and may see some selling below the temporary top at 185.94. However, as long as the support level at 182.71 holds, further upside is expected. Bulls will look to resume the rebound initiated at 178.02 once above 185.94, with the first target being a retest of the 186.45 resistance. A decisive breakout would signal a resumption of a larger uptrend.

From a broader perspective, as long as the support at 176.29 holds, the larger uptrend that began at 123.94 should still be in progress. A breakout above 186.75 targets 195.30 (the 2015 high). Nevertheless, holding the line at 176.29 would confirm a medium-term top and introduce a longer and deeper consolidation. In terms of trading strategy, it's advisable not to chase shorts, and focus on buying the dips.

Trading Recommendations

Trading Direction: Long

Entry Price: 183.60

Target Price: 186.70

Stop Loss: 180.30

Valid Until: 2023-11-23 23:55:00

Support: 184.64, 183.52, 182.72

Resistance: 185.94, 186.45, 186.75