GBP/JPY is rising aggressively and reached a two-month high of 153.83 during today’s European session.
The pair has surpassed successfully the upward sloping channel, which has been holding since March 5, indicating that the bullish extension continues. The technical indicators, continue to send bullish signals, suggesting that the strengthens in the market is not over yet.
In the 4-hour chart, the RSI is pointing upwards at overbought levels, slightly above 70 indicating that the market could strengthen a little bit in the short-term until the index falls below that threshold. The MACD also supports a bullish picture, as the indicator continues to increase positive momentum above its red-trigger line.
Should the price extend its uptrend, the next critical resistance level to have in mind is the 154.00 handle. A session close above this level could drive the pair towards the next key level of 156.60, taken from the peak on February 2.
However, if the market fails to pick up speed, the 20-simple moving average (SMA) at 151.93 could offer nearby support ahead of the 40-SMA which currently stands at 151.25 at the time of writing. A slip below these levels could touch the 150.90 barrier, raising chances for further downside pressure.
by Melina Deltas, XM Investment Research Desk
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.
Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).