GBP/JPY Pullback Stalls Ahead of the Monthly Low

GBP/JPY consolidates after rallying to a fresh yearly high (208.12) during the previous week, but the exchange rate may continue to track the positive slope in the 50-Day SMA (200.24) as it holds above the monthly low (204.74).

GBP/JPY Outlook

Keep in mind, the recent decline in GBP/JPY pulled the Relative Strength Index (RSI) back from overbought territory, and a close below 204.90 (61.8% Fibonacci extension) raising the scope for a move towards the monthly low (202.57).

Next area of interest comes in around 202.00 (23.6% Fibonacci extension) to 202.40 (50% Fibonacci extension) but the pullback in GBP/JPY may end up short-lived amid the failed attempts to close below 204.90 (61.8% Fibonacci extension).

Need a move above 206.60 (100% Fibonacci extension) to bring the monthly high (208.12) on the radar with the next area of interest coming in around 208.60 (78.5% Fibonacci extension).

--- Written by David Song, Strategist at FOREX.com