GBP/JPY - GBPJPY review for the week - 05/23/2024 (GMT)

The pound-yen pair  has a more aggressive rally than the pound-dollar pair with almost no days of retracement. The aggressiveness of the recent rally has pushed the Stochastic oscillator levels to almost 100, the highest level on this indicator, showing that the pair is extremely overbought and the possibility of a sharp correction to the downside is rather high. However, the levels on the Stochastic are rarely kept in the extreme levels for a prolonged period of time this does not mean it cannot happen. The Bollinger bands have been keeping their distances since late April showing that there is high volatility for the pair in the market but this does not suggest that the direction will also remain bullish. In addition the price is trading above all technical indicators (Fibonacci levels, moving averages) showing the momentum of the bulls is still strong. Also the faster moving averages of 20 and 50-days , red and green lines respectively, are trading well above the slower 100-day moving average (white line) further validating the bullish trend.  
If the ¥200 proves to be strong enough to stop the bullish rally and the price retraces down then the first area of possible support could probably be seen around the ¥198 price area which is the previous high of late April and is also just below of th 78.6% of the daily Fibonacci retracement level. The second area of technical support might be the ¥186 which is the 50% of the Fibonacci retracement level. On the other hand if the bulls are stronger than the bears and the price continues its bullish trend then the price area around ¥200 is the first level of major resistance since it consists of the upper band of the Bollinger bands and the psychological resistance of the round number.