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GBP/JPY Trading at the Crossroads

As we begin the week, GBP/JPY is trading at the crossroad between some key resistance factors around 173.00, and key support factors around 171.00. 

GBP/JPY Daily Chart 8/25
(click to enlarge)

As you can see on the daily chart, 171.00 was a common support in the past couple of weeks. The 200-day SMA is now around 171.00. The RSI dipped below 40, but failed to dip below. What does this all means? It reflects that
bears are NOT in charge, and that there is still some bullish bias despite the decline since June from 175.36 to 170.42.


Looking up, we see
resistance around the psychological level of 173.00. Here we have the 50-day simple moving average (SMA), and a falling trendline from the 175.36 high on the year. 

Bullish vs. Bearish Scenarios:
A break above 173.00 should open up a bullish continuation scenario, at least to challenge the 175.36 high. A break below 171, or better yet, below 170.40, should open up a bearish outlook toward the common lows around 168.00, from March.