- GBP / JPY gained strong positive traction for the second session in a row on Thursday.
- The sustained move beyond the 140.40 / 50 supply zone has laid the foundation for further gains.
- Only a sustained break below the 140.00 mark will negate the short-term bullish outlook.
The crossing GBP/JPY It built on the strong positive move the day before and continued to climb higher during the first half of trading action on Thursday. Momentum pushed the cross beyond the 14040/50 strong supply zone, to fresh monthly highs in the last hour.
Given this week’s solid rally from a three-month rising trend line support, some Follow-up purchases beyond the 140.70 region are seen as a new trigger for bull traders. This, in turn, should pave the way for a further short-term appreciation move. In fact, GBP / JPY hit nearly four-month highs today around 140.95
The constructive structure is reinforced by the fact that the technical indicators on the daily chart are comfortably staying in positive territory. However, the RSI on the hourly charts already shows intermittent overbought conditions and warrants caution for bullish traders.
That said, the Momentum appears strong enough to push the GBP / JPY cross past the 141.00 mark, towards the 141.40 region. The bullish trajectory could extend to the September daily closing highs around the 141.75 / 80 region en route to the 142.00 round figure.
On the other hand, any significant pullback below the 140.50 / 40 resistance breakout point could now be seen as a buying opportunity. This, in turn, should help limit the downside near the key psychological mark of 140.00 amid hopes for an imminent Brexit deal.
Only a convincing break below the mentioned support levels will negate the short-term bullish outlook and trigger some aggressive technical selling. The GBP / JPY cross could become vulnerable to break below the 139.00 mark and test the next support near the mid-138.00 mark.
GBP / JPY Daily Chart
Technical Levels
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