- GBP / JPY: A daily break above a four-month downtrend line will exert upward pressure.
- The Relative Strength Index on the daily and 4-hour chart supports a bullish bias.
During the Asian session, the GBP/JPY fell to a daily low of 151.12. However, in the European session and as the day progresses, the British pound is recovering, trading at 152.14, up 0.42%, at the time of writing.
GBP / JPY Price Forecast: Technical Outlook
Daily chart
GBP / JPY is trading above a four-month downtrend line, tested unsuccessfully three times. The cross currency spot price is 152.17. A daily close above that trend line could pave the way for further gains. The first supply zone would be the confluence of the 100-day moving average (DMA) and the September 14 high around the 152.70-85 range. A breakout of the latter could push the GBP / JPY towards the July 13 high of 153.48, followed by the psychological 154.00.
On the other hand, a daily close below the 50-DMA at 151.55 could open the door to further losses. The first demand zone would be 151.00. A daily close below that level could put downward pressure on GBP / JPY. The next support levels would be the 200 DMA at 150.00 and the September 21 low at 148.95.
The Relative Strength Index is at 57, aiming higher, supporting a bullish bias.
4 hour chart
This chart shows that GBP / JPY could consolidate between the 151.75-152.20 range. A break above the top of the range, 152.20, could expose the 100 DMA mentioned in the daily chart analysis, around 152.70-85.
On the other hand, a decisive breakout of 151.75 could put downward pressure on the pair. The first demand zone would be the confluence of the 100 and 200 simple moving averages (SMAs) around the 151.20-35 range. Breaking the latter would expose 151.00.
The Relative Strength Index is at 68, heading down. But as long as it remains above the 50 midline despite hitting oversold readings, keep the uptrend intact.
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