GBP/JPY reverses the previous day’s drop from a one-week high. A persistent rebound off the 21-SMA and bullish MACD indications favour buyers.

Upward movements are opposed by a downward trend line that is five weeks old and 200-SMA. In the lead-up to Wednesday’s London opening, the pair receives more offers and prints modest gains around 166.65. The cross-currency pair then reverses the previous day’s losses from the one-week high by bouncing off the 21-SMA.

To maintain the optimism of the GBP/JPY purchasers, the recovery movements also draw cues from the positive MACD indications.

Buyers of the pair may find it difficult to overcome a confluence of the 200-SMA and a downward-sloping resistance line from the end of October, located at 167.30.

A run-up towards the late November swing high at 169.00 and eventually to the 170.00 psychological magnets is likely if the GBP/JPY passes the 167.30 thresholds.

The October high of 172.15 and the prior monthly top at 171.00 may have encouraged GBP/JPY buyers to over 170.00.

On the other hand, pullback movements are difficult to execute beyond the 166.00 21-SMA support level.

After that, the final line of defense for the GBP/JPY buyers might be an ascending trend line from November 11 that was, at the time of press, at 164.25.

The cross-currency pair will decline to its October low at 159.70 if it continues to trend down after reaching 164.25 and breaks the 164.00 resistance level.

GBP/JPY 4-hour chart