GBPJPY has successfully overcome the upward resistance line drawn from May’s peak of 146.49 and rallied above the 50-day simple moving average (SMA) to test the 133.00 mark and the upper surface of the Ichimoku cloud after four months.

The positive momentum in the MACD and the RSI reflects a strong bullish bias for the short-term. Yet, overbought signals look to be appearing on the horizon as the price is flirting with the upper Bollinger band for almost a week and the distance between the RSI and the 70 overbought mark is narrowing.

Above the 133.00  level and the cloud, the door would open for the 135.50 support-turned-resistance handle, a break of which could stage another bullish run towards the 137.88-138.70 area where the 50% Fibonacci of the downleg from 149.47 to 126.53 is also placed. A decisive close above the 200-day SMA could generate more upside pressure, navigating the bulls towards the 61.8% Fibonacci of 140.65.

Failure to exit the cloud would bring the 50-day SMA currently around 131.54 back into view, while slightly lower, the 130.68 level could  curb downside corrections ahead of the 128.00 number. Falling under the 3-year low of 126.53, the bears could initially pause around 125.00 and then near the 123.80 strong barrier where the post-Brexit referendum downfall broke on October 2016. If the latter fails to hold, the sell-off could stretch until 122.00.

Meanwhile in the bigger picture, the pair continues to make lower lows and lower highs, keeping the outlook negative. The odds for a trend reversal are currently looking weak as the 50-day SMA shows no appetite of correcting its bearish cross with the 200-day SMA.

Summarizing, GBPJPY is likely to gain some ground in the short-term, though downside corrections cannot be ruled out. In the bigger picture, the downward pattern continues to keep sentiment negative. 

GBPJPY

Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD extends its decline amid upbeat US consumer confidence

EUR/USD is extending its falls toward 1.1050 after US Consumer Sentiment beat expectations with 92 points. Earlier, retail sales met expectations. 

EUR/USD News

GBP/USD rises above 1.24 as Brexit uncertainty prevails

GBP/USD hits a 6-week high above 1.24. The DUP dismissed reports that it would accept special treatment for the province as a solution to the backstop. The EU is ready to grant a Brexit extension as Johnson faces growing criticism.

GBP/USD News

USD/JPY: holding in higher ground ahead of US Retail Sales

Risk appetite dominates the financial world, weighing on safe-haven assets. US Retail Sales and the preliminary Michigan Consumer Sentiment Index up next. USD/JPY bullish case prevails, 107.45 critical Fibonacci support.

USD/JPY News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more

Gold remains on track to end week below $1,500

The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand. 

Gold News

Forex Majors

Cryptocurrencies

Signatures