GBP/JPY Price Analysis: Daily break above a four-month trendline could expose 153.00 and beyond
- GBP/JPY: A daily break above a four-month descending trendline will exert upward pressure.
- The Relative Strength Index in the daily and the 4-hour chart support an upside bias.
During the Asian session, the GBP/JPY dipped to a daily low of 151.12. However, in the European session and as the day progresses, the British pound is staging a recovery, trading at 152.14, up 0.42%, at the time of writing.
GBP/JPY Price Forecast: Technical outlook
Daily chart
The GBP/JPY is trading above a four-month descending trendline, unsuccessfully tested three times. The cross-currency spot price is 152.17. A daily close above that trendline 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 152.70-85 range. A break of the latter could push the GBP/JPY pair towards the July 13 high at 153.48, followed by the psychological 154.00
On the flip side, a daily close below the 50-DMA at 151.55 could open the door for further losses. The first demand zone would be 151.00. A daily close beneath that level could exert downward pressure to GBP/JPY. The following 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 an upside bias.
4-hour chart
This chart depicts 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 flip side, a decisive breach of 151.75 could exert downward pressure on the pair. The first demand zone would be the confluence of the 100 and the 200-simple moving averages (SMA’s) around the 151.20-35 range. The break of the latter would expose 151.00.
The Relative Strength Index is at 68, heading lower. But as long as it remains above the 50-midline despite reaching oversold readings, keep the uptrend intact.
