GBP/JPY Price Analysis: Holds steady around 153.00 mark, bias seems tilted in favour of bulls
- GBP/JPY reversed an intraday dip to the 152.60 area and moved back to the 153.00 mark.
- The formation of a bullish inverted head & shoulders supports prospects for further gains.
- A sustained move beyond the 153.40-45 neckline is needed to confirm the positive outlook.
The GBP/JPY cross rallied over 40 pips from the early European session lows, with bulls making a fresh attempt to build on the momentum beyond the 153.00 mark.
Looking at the technical picture, the recent price action over the past one month or so constitutes the formation of a bullish inverted head and shoulder pattern on short-term charts. The neckline resistance is pegged just ahead of mid-153.00s, which if cleared decisively will be seen as a fresh trigger for bulls.
Meanwhile, technical indicators on hourly charts have been gaining positive traction and further add credence to the constructive setup. Moreover, oscillators on the daily chart have just started moving into the bullish territory and support prospects for an extension of the recent bounce from the vicinity of the 151.00 mark.
That said, it will still be prudent to wait for a sustained break through the neckline resistance, around the 153.40-45 area, before confirming a near-term bullish breakout. The GBP/JPY cross might then aim to reclaim the 154.00 mark. The momentum could further get extended towards the next relevant hurdle near the 154.55-60 region.
On the flip side, the 152.50 level now seems to have emerged as immediate strong support. Any subsequent decline might be seen as a buying opportunity near the 152.00 round-figure mark. This, in turn, should help limit any further downside for the GBP/JPY cross near the 151.15 support area touched last Monday.
GBP/JPY daily chart
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Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
