GBP/JPY Price Forecast: Tests major resistance level but short-term trend bullish
- GBP/JPY has tested a key resistance level and pulled back.
- Notwithstanding the roadblock, the short-term trend remains bullish and could lead to more gains.
GBP/JPY is seen rising for the eighth consecutive day on Wednesday. It has tested and then pulled back from the key September 2 high at 193.49, a major resistance level. The short-term trend is bullish despite the roadblock and could continue, pending a decisive break.
The 50% Fibonacci retracement level of the July decline at 194.03, could provide further resistance to bulls.
GBP/JPY Daily Chart
GBP/JPY is in an established short-term uptrend after rising up off 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.
The pair could simply continue higher, therefore, although it would need to decisively break above the resistance line at 193.49 to confirm such an extension.
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, however, signifying no bias in either direction, whilst 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.
