- GBP / JPY recovered positive momentum on Thursday and rose again above 142.00.
- The technical setup remains in favor of the upside, supporting more rises.
The surge of buying on reversals should help limit the decline near the horizontal support at 141.25.
After the sharp retracement the day before of more than 100 pips, the GBP / JPY cross was in demand on Thursday and jumped back above 142.00.
The appearance of some purchases in the face of setbacks favors bullish traders and supports the prospects of a new short-term appreciation movement. The positive outlook is reinforced by the fact that the recent appreciation movement over the past four months has been in an upward bullish channel.
Meanwhile, the technical indicators on the day chart maintained their bullish bias and are still far from being in overbought territory. Therefore, a subsequent positive move to challenge the trend channel resistance, around 143.00, remains a clear possibility.
A sustained move further will mark a new break to the upside. The GBP / JPY cross could then aim to overcome the intermediate obstacle of 143.30 / 40 and regain 144.00. Momentum could extend further towards the swing highs of 2020, just ahead of the key psychological zone of 145.00.
On the other hand, any significant pullback could continue to draw some buying around the horizontal resistance-turned-support at 141.25. This is closely followed by 141.00, which if decisively broken could drag the GBP / JPY cross to the 140.45 level, on its way to 140.00.
GBP / JPY day chart
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