GBP/JPY Price Analysis: Recovers further from multi-month lows, climbs to mid-134.00s

The GBP/JPY cross built on this week's modest rebound from the 133.00 mark, or near three-month lows and edged higher for the second consecutive session on Thursday. The cross has now moved back above 100-hour SMA, with bulls now looking to build on the momentum beyond the overnight swing high.

Given that the cross had shown some resilience below the 50% Fibonacci level of the 124.07-142.72 move up, a subsequent move beyond the 134.50-60 region might prompt some short-covering move. The cross might then accelerate the momentum towards reclaiming the key 135.00 psychological mark.

The intraday constructive outlook is reinforced by the fact that oscillators on the 1-hourly chart have been gaining positive traction. However, oscillators on 4-hourly/daily charts are yet to recover from the bearish territory and warrant some caution before positioning for any further gains.

Hence, any subsequent move up is likely to confront a stiff resistance and remain capped near the 135.60-65 confluence support breakpoint. The mentioned region comprised of 38.2% Fibo. level and 100-day SMA, which should now act as a key pivotal point and help determine the near-term trajectory.

On the flip side, the 134.00 mark now seems to protect the immediate downside. Failure to defend the mentioned support could drag the cross towards the 133.40 horizontal level en-route the 133.00 mark. Some follow-through selling will be seen as a fresh trigger for bearish traders.

The cross might then prolong its recent depreciating move and slide further towards 61.8% Flevel, around the 131.75-70 area. The 132.40-50 region might act as intermediate support on the way down.

GBP/JPY daily chart

Technical levels to watch