GBP/JPY Price Analysis: Double bottom on the hourly chart pushes the pair above 164.70

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  • GBP/JPY rallies 200 pips and hits a daily high of 165.08.
  • Sterling was buoyed by market sentiment, despite US data reigniting recession fears.
  • GBP/JPY remains range bound after hitting a double bottom target at 164.50.

The GBP/JPY erases last Friday’s losses and gains close to 1% on Monday, amid a better market mood, with US stocks rising, before US tech mega-corporations report results, after US data further reinforce the recession scenario. At the time of writing, the GBP/JPY pair is trading at 164.70.

GBP/JPY Price Analysis: Technical Outlook

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From a daily chart point of view, the GBP/JPY pair remains in a bullish bias as sellers are unable to sustain prices below the 50-day EMA at 163.62. It is also worth noting that the Relative Strength Index (RSI) came out of negative territory, and is about to break above the RSI’s 7-day SMA around 52.41, which would exacerbate and open a move to the top. from July 21 at 165.98. However, GBP/JPY would be vulnerable to selling pressure unless the latter is achieved.

GBP/JPY 1 hour chart

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The GBP/JPY 1 hour chart shows that the pair formed a double bottom around the 163.00 area, which reinforced the cross, which rallied close to 200 pips. On its way north, the GBP/JPY pierced the 100 hourly EMA at 164.90 before pulling back above the 200 hourly EMA at 164.68. However, as the RSI is about to enter overbought conditions and price action lacks the strength to break 165.00 at the end of the American session, I would keep the pair in a range.

GBP/JPY’s first resistance would be the July 25 high at 165.08. A break above will expose the confluence of the 21st Jul high and the R2 pivot around 166.00. On the other hand, the first GBP/JPY support would be the R1 daily pivot point at 164.58. Once broken, the next support would be the 163.97-164.12 zone, followed by the daily pivot point at 163.79.

Technical levels

GBP/JPY

Panorama
Last Price Today 164.64
Today’s Daily Change 1.35
Today’s Daily Change % 0.83
Today’s Daily Opening 163.29
Trends
20 Daily SMA 164.23
50 Daily SMA 163.57
100 Daily SMA 161.97
200 Daily SMA 158.17
levels
Previous Daily High 165.15
Previous Daily Minimum 163.01
Previous Maximum Weekly 166.25
Previous Weekly Minimum 163.01
Monthly Prior Maximum 168.74
Previous Monthly Minimum 160
Daily Fibonacci 38.2% 163.83
Daily Fibonacci 61.8% 164.33
Daily Pivot Point S1 162.48
Daily Pivot Point S2 161.67
Daily Pivot Point S3 160.34
Daily Pivot Point R1 164.63
Daily Pivot Point R2 165.96
Daily Pivot Point R3 166.78

Source: Fx Street

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