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A move above the previous day’s high paves the way for additional gains

  • GBP / JPY attracts some lower level buying and returns to the 137.00 zone.
  • The setup favors the bulls and supports the prospects for additional intraday gains.

After showing some resistance below the 100 hourly SMA, the GBP / JPY cross has regained positive traction and has risen near the 137.00 region during the European session on Tuesday. The subsequent bullish move has pushed the cross past the 200 hourly SMA, with the bulls now looking to extend momentum towards the prior day’s highs around the 137.25 region.

Bullish technical indicators on the 1-hour and daily charts support prospects for an extension of the intra-day move amid a selling tone around the safe-haven Japanese yen. Any continuation force above the immediate obstacle at 137.25-35 will reassert the constructive outlook and pave the way for a move to test out of the 137.80-85 resistance zone.

On the other hand, immediate support is now near the horizontal zone of 136.70 and is followed by the daily lows, around the 136.35 region. Failure to defend the mentioned support levels could spark some technical selling and nullify any near-term bullish bias, paving the way for a pullback towards challenging the key psychological level of 135.00.

This last level coincides with the monthly minimums hit on October 2. In case of breaking decisively it will be seen as a new trigger for the bears. The GBP / JPY cross could become vulnerable to extend the slide towards the intermediate support of 134.55 on its way to the round level of 134.00 and the recent daily closing lows around the 133.65 region.

GBP / JPY 1 hour chart


Credits: Forex Street

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