- GBP/JPY gained some positive traction on Monday, albeit lacked any strong follow-through.
- Mixed technical set-up warrants some caution before placing any aggressive directional bets.
The GBP/JPY cross traded with a mild positive bias through the early European session, albeit lacked any strong follow-through and remained below the 139.00 mark.
From a technical perspective, Friday’s sharp intraday downfall dragged the cross below a near two-month-old ascending trend-channel and might have already set the stage for additional weakness. The bearish bias is further reinforced by the fact that oscillators on hourly charts have been gaining negative momentum.
However, technical indicators on the daily chart – though have eased from higher levels – are still holding in the bullish territory. Hence, any subsequent fall might still be seen as a buying opportunity. This, in turn, should help limit the downside near the 137.85-75 horizontal support, at least for the time being.
On the flip side, traders might struggle to lift the cross back above the mentioned channel support breakpoint, around the 139.00 level. That said, a convincing breakthrough might prompt some short-covering move and lift the cross back towards previous strong support, now turned resistance near the 138.85-90 horizontal zone.
GBP/JPY 4-hourly chart
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Technical levels to watch
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