GBP/JPY technical analysis: Breaks through 50-DMA, descending trend-line confluence hurdle
|- The recent Brexit optimism continues to underpin the GBP.
- Upbeat UK data provides an additional boost on Monday.
- Seems poised to extend the recent bounce from multi-year lows.
The British Pound strengthened across the board in reaction to upbeat UK macro data and lifted the GBP/JPY cross back beyond the 132.00 handle to fresh one-month tops. The intraday positive momentum further assisted the cross to make it through a confluence barrier, comprising of 50-day SMA and over one-month-old ascending trend-line.
Meanwhile, technical indicators on the daily chart have just started gaining positive traction and support prospects for an extension of the recent rally from multi-year lows. However, slightly overbought conditions on the 4-hourly chart might keep a lid on any subsequent up-move and thus, warrant some caution before placing aggressive bullish bets.
From current levels, immediate resistance is pegged near the 132.90-133.00 region, above which the cross is likely to accelerate the up-move towards reclaiming the 134.00 handle. On the flip side, any meaningful pullback below the mentioned confluence resistance breakpoint might now attract some dip-buying interest and help limit the further downside near the 131.00 mark.
GBP/JPY daily chart
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