GBP/JPY has been trading in a sideways manner lately, specifically since November 4th, when it fell sharply after hitting the 156.20 zone. The current range is between the 152.60 and 153.70 barriers, which suggests a neutral short-term bias. However, bearing in mind that the pair is also trading below the downside line taken from the high of October 26th, we would see more chances for a downside exit out of the range, rather than an upside one.
We will get even more comfortable with the downside upon a break below the 152.16 barrier, marked by the inside swing high of October 6th. This may encourage the bears to dive towards the low of that day, at around 150.80, or the low of October 4th, at around 150.20. If they are not willing to stop there either, then a break lower could pave the way towards the low of October 1st, at 149.20.
Shifting attention to our short-term oscillators, we see that the RSI lies below 50, pointing somewhat down, while the MACD, already below zero, has touched its toe below its trigger line. Both indicators suggest that the pair may start gaining downside speed again soon, which increases the chances for another leg south soon.
Now, in order to start examining whether the bulls have gained the upper hand, we would like to see a break above 154.63, marked by the inside swing low of November 2nd. This may confirm the break above the aforementioned downside line taken from the high of October 26th and could initially pave the way towards the 156.20 obstacle, defined as a resistance by the high of November 4th. Another break, above 156.20, could allow extensions towards the 157.10 barrier or even the 157.79 zone, marked by the highs of October 29th and 26th respectively.
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