Bulls defend 200-EMA at 160.20, consolidation ahead

The asset is juggling in a narrow range of 160.28-161.31 since the first trading session of April.
The RSI (14) in a 40.00-60.00 range signals consolidation but will be followed by a volatility expansion.
Pound bulls need to break above the ascending triangle formation to regain control.

The GBP/JPY pair is losing investors’ attention amid a lackluster movement. The cross is oscillating in a narrow range of 160.28-161.31 from the last three trading sessions. It is worth noting that the pair recorded a fresh 6-year high at 164.65 a week prior but failed to sustain at higher levels.

On an hourly scale, GBP/JPY is auctioning in an ascending triangle pattern whose horizontal resistance is placed at 161.32 adjoining the March 29 high and Monday’s high respectively while the advancing trendline has plotted from Wednesday’s low at 159.05. The 200-period Exponential Moving Average (EMA) at 160.23 has been a major support for the asset. However, the 50-period EMA is overlapping on the asset. The overlapping of a short-term EMA and asset prices indicates a volatility contraction.

The Relative Strength Index (RSI) (14) is prolonged oscillating in a 40.00-60.00 range, which signals a consolidation going forward.

A breakout of the ascending triangle above 161.32 will be followed by a strong upside move, which will send the asset towards the March 29 high at 162.62, followed by a 6-year high at 164.65.

On the flip side, yen bulls may strengthen if the asset slip below the symmetrical triangle formation by violating 200-EMA at 160.23, which will drag the major towards the March lows at 159.06. A breach of the March lows will expose the asset to February highs at 158.06.