GBP/JPY Price Analysis: Extends bounce off 10-DMA towards three-month-old resistance

• GBP/JPY takes the bids to refresh weekly, up for the second consecutive day.
• Overbought RSI, looming bear cross may again challenge buyers.
• Upside break of needs validation from monthly high, 2021 peak.

GBP/JPY refreshes weekly top to 157.41 while stretching the previous day’s rebound from 10-DMA to early Wednesday. In doing so, the cross-currency pair eyes a downward sloping resistance line from October 20.

Although bullish MACD signals hint at the pair’s further advances, overbought RSI and previous failures to cross the key hurdle around 157.70 teases bears. Furthermore, a looming bearish cross between the 50-DMA and 100-DMA also challenges the quote’s further advances.

Even if the quote rises past 157.70, it needs to cross the monthly high of 157.76 and 2021 top surrounding 158.22 to convince the GBP/JPY bulls.

Following that, the 160.00 threshold and May 2016 peak of 163.90 should lure the pair buyers.

Alternatively, pullback moves remain elusive beyond the 10-DMA level of 156.57, a break of which will direct GBP/JPY sellers towards the weekly bottom of 155.95.

However, any further downside will be challenged by the mid-November’s high near 154.75 and a confluence of the 100-DMA and 50-DMA close to 153.05.

GBP/JPY: Daily chart

Trend: Pullback expected