- GBP/JPY eyes stronger oversold bounce to 138.
- The 4-hour chart is flashing bullish divergence of the RSI.
- The 14-day RSI is reporting oversold conditions.
GBP/JPY is currently trading largely unchanged on the day around 137.35 and could rise to the 4-hour chart 50-candle moving average (MA) at 138 during the day ahead, as technical indicators are pointing to seller exhaustion.
For instance, the 4-hour chart relative strength index (RSI) is flashing a channel breakout, having created a bullish divergence on Tuesday.
Further, the 14-day RSI is also reporting oversold conditions with a below-30 print for 22nd consecutive day.
The case for a rise to 138.00 would weaken if the pair finds acceptance below 137.00, although that looks unlikely.
4-hour chart
Trend: Oversold bounce likely
Technical Levels
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