XM Investment Research Team
XM
GBPJPY staged a strong rally from below the key 130.00 level and steadily rose above several resistance levels to finally reach the 200-day moving average which is now acting as a strong barrier to further upside moves.
Prices reached a high of 143.69 where they found resistance at the 200-day moving average and this halted the rally. Meanwhile, RSI is in overbought territory above 70 which suggests that consolidation or a pull-back is due in the near term.
The short-term market structure would be strengthened if there is a successful break above the 200-day moving average, which coincides with a Fibonacci level – the 38.2% Fibonacci retracement of the February to October downleg from 175.00 to 123.96. Further upside from this strong resistance level at 143.46, would target a move towards the 150.00 area and the 50% Fibonacci.
Overall, the short-term bullish market structure will remain in place unless prices fall below 137.00. A daily closing below support at 137.00 would lead to downside moves towards 130.00 and below this level the market would retest the low at 123.96.
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