GBP/JPY Price Analysis: Rebounds from 100-period SMA/ascending channel confluence

• GBP/JPY stalled its intraday downfall near the 138.60-50 confluence support.
• Diverging technical indicators warrant caution before placing directional bets.

The GBP/JPY cross extended the previous day's rejection slide from the key 140.00 psychological mark and witnessed some selling through the major part of the trading action on Thursday.

The cross, however, managed to find decent support around the 138.50-60 confluence support and refreshed daily tops in the last hour. The mentioned area comprises of 100-period SMA on the 4-hourly chart and the lower boundary of a near two-month-old ascending channel, which should now act as a key pivotal point for short-term traders.

Meanwhile, technical indicators on the daily chart maintained their bullish bias and have again started moving into the positive territory on hourly charts. The set-up warrants some caution for bearish traders, making it prudent to wait for a sustained breakthrough the said confluence region before placing fresh bearish bets.

On the flip side, any meaningful positive move might continue to act as a stiff resistance near the 140.00 mark, above which a bout of a short-covering move. The cross might then aim to test the trend-channel resistance, currently near the 141.00 round-figure mark.

GBP/JPY 4-hourly chart

Technical levels to watch