The GBPJPY keeps firm bullish tone and riding on extended third wave of five-wave cycle from 155.35 (Jan 3 low) and trading near the highest level in 7.5 years on Friday.
The cross is on track for the fourth consecutive weekly gain, as sterling remains supported across the board, from weaker dollar on current prevailing expectations that the Fed will stay on hold on next week’s policy meeting, while the Bank of England is widely expected to raise its interest rate for the thirteenth consecutive time on June 22 June, when the MPC will hold a policy meeting.
Bulls remain unobstructed for now, despite overbought conditions on daily chart and pressure next target at 175.50 (Fibo 161.8% expansion) which guards psychological 180 barrier (also 200% Fibo expansion).
However, bulls may take a breather on overbought studies and fading bullish momentum, as 14-d momentum also shows bearish divergence, with limited dips (ideally to find ground above rising daily Tenkan-sen at 173.89) to offer better opportunities to join bullish market.
Only loss of higher base at 172.60 zone would slow bulls and risk deeper pullback.
Res: 175.25; 175.50; 176.07; 178.52.
Sup: 174.67; 173.89; 172.60; 171.88.
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