GBP/JPY Price Analysis: Bulls keep momentum steady, overbought indicators signal near-term correction possible
- The pair rose to highs since 2007 at 199.90.
- The daily RSI indicates an overextended buying momentum, suggesting a pending technical correction.
- The hourly indicators have already started to consolidate.
In Friday’s session, the GBP/JPY pair experienced upward momentum, rising by 0.37% and the pair reached multi-year highs, a clear indication of the stronghold buyers have within the market. While a near-term technical correction could potentially occur due to the overbought condition, the overall outlook remains bullish for the cross.
In the daily chart, the Relative Strength Index (RSI) has moved deep into overbought territory. The persistently high values hint at strong buying sentiment, but they also suggest a potential future correction. The Moving Average Convergence Divergence (MACD) reveals flat green bars, indicating positive momentum despite the relatively stable trend which may suggest that the pair might consolidate for the rest of the session.
GBP/JPY daily chart
When examining the hourly chart, the RSI reveals noticeable ebbs and flows, with the latest value standing at 61. Although still positive, this level appears somewhat less intense when compared to the daily chart. The hourly MACD histogram continues to display flat green bars, indicating steady positive momentum which mirrors its daily counterpart.
GBP/JPY hourly chart
From a broader outlook, the GBP/JPY's position relative to its Simple Moving Averages (SMAs) helps to clarify the overall trend. The pair stands above the 20, 100, and 200-day SMAs, reflecting a bullish outlook for both short and long-term scenarios.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
