GBP/JPY Price Forecast: Major resistance level attained
- GBP/JPY has rallied to a key resistance level – the September 2 high.
- It could face increased resistance and would need to decisively break higher to extend the trend.
GBP/JPY rises for the seventh consecutive day on Tuesday. It is now close to the key September 2 high at 193.49. This is also close to the 50% Fibonacci retracement level of the July decline at 194.03. These levels are likely to present significant resistance to the pair, which may pullback as a result.
GBP/JPY Daily Chart
That said, GBP/JPY is in an established short-term uptrend since it pivoted at the September 11 low. Since it is a principle of technical analysis that “the trend is your friend” this uptrend is more likely than not to extend.
There is, therefore, a chance the pair could simply continue higher. If it can decisively break above the resistance line at 193.49 it will confirm an extension of the short-term trend higher.
A decisive break would be one accompanied by a longer-than-average green candle that closed near its high, or three green candles in a row that broke above the level.
The medium-term trend is sideways, signifying no bias in either direction. The long-term trend is up.
Author
Joaquin Monfort
FXStreet
Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.
