GBPJPY Price Analysis: Hovers around 166.00 after climbing above the head-and-shoulders neckline
- The GBPJPY extended its gains and reached a fresh weekly high of around 166.45.
- For the GBPJPY buyers to invalidate the head-and-shoulders pattern, they must reclaim 169.00.
- GBPJPY's fall below 165.30 would keep the head-and-shoulders pattern in play.
The GBPJPY rises for the fourth consecutive day, threatening to invalidate a head-and-shoulders chart pattern formed in the daily chart, as the exchange rate surpasses the neckline as the cross pushes above the 165.00 mark. At the time of writing, the GBPJPY is trading at 166.37, above its opening price by 0.10%, after hitting a daily low of 165.17.
GBPJPY Price Analysis: Technical outlook
The GBPJPY shifted from neutral-to-downward to upward-biased once the cross-currency pair achieved two conditions: reclaimed the 50-day Exponential Moving Average (EMA) and broke above the head-and-shoulder pattern neckline, which is still in play. That said, the GBPJPY consolidates on top of the neckline but remains unable to crack the weekly high of 166.40. The Relative Strength Index (RSI) is almost flat ath the 50-midline, suggesting the pair would remain sideways.
Therefore, the GBPJPY's first resistance area would be the 166.45 area. Once cleared, the next supply zone would be the 167.00 psychological level, followed by the November 8 swing high at 169.08, invalidating the head-and-shoulders chart pattern.
On the flip side, if GBPJPY sellers want to reclaim the head-and-shoulders neckline, they need to break below 165.30. A breach of the latter would send the pair diving to the 165.00 figure, followed by key support levels, like the 50-day EMA at 164.88 and the 100-day EMA at 163.94.
GBPJPY Key Technical Level
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
