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11 Oct 2016
Indicators signaling GBP/JPY is oversold
While intraday moving averages point at a continued GBP/JPY depreciation, the latest momentum readings raise the odds of a minor throwback.
GBP/JPY appears primed for a pullback, at least towards overhead resistance established by the 50-period simple moving average. Consistent declines locked RSI below the 50% mark for most of the last 3 weeks.
More noticeable was the recent sell off which led the oscillator plunge below its 25% level. This showed that market participants are keen on selling. In the context of a prolonged down trend, the 4-hour RSI looks now very heavy on the sell side so it could be prone to a squeeze back higher. However, the risks are but still skewed to the downside.
GBP/JPY appears primed for a pullback, at least towards overhead resistance established by the 50-period simple moving average. Consistent declines locked RSI below the 50% mark for most of the last 3 weeks.
More noticeable was the recent sell off which led the oscillator plunge below its 25% level. This showed that market participants are keen on selling. In the context of a prolonged down trend, the 4-hour RSI looks now very heavy on the sell side so it could be prone to a squeeze back higher. However, the risks are but still skewed to the downside.