Technical Analysis – GBPJPY bullish again after breaching 147

Posted on May 9, 2017 at 8:27 am GMT by the XM Investment Research Desk

GBPJPY turned bullish again today and extended higher to breach above the key 147 level for the first time since December 2016. A daily close above this level is needed to maintain the bullish momentum.

Near-term resistance is at the mid- December high of 148.44 and any break above will propel the pair towards the key 150 level and then to key resistance at 151.47. This is the 38.2 Fibonacci retracement level of the decline from 195.87 to 123.97 (June 2015 to October 2016 drop).

Failure to close above 147 today and fading upside momentum could bring about a pull back. Strong support is viewed at the 144 level. Below this, 140.30 is another important support area and a drop below would weaken the short-term bullish bias.

The positive alignment of the tenkan-sen and kijun-sen lines are supporting a bullish structure. The market is above the Ichimoku cloud and above both the 50-day and 200-day moving averages – also a bullish picture. The RSI and stochastics may be pointing to overbought conditions, so consolidation or a pull-back could be expected in the near term.

Source: www.xm.com