- The GBP/JPY cross witnessed a dramatic intraday turnaround on Tuesday and rallied nearly 200-pips from the 128.00 neighbourhood – the lowest level since Nov. 2016.
- Bulls, however, failed to extend the positive momentum further beyond the key 130.00 psychological mark, which should now act as a key pivotal point for short-term traders.
The mentioned handle coincides with 23.6% Fibo. level of the 135.68-128.10 recent down leg, above which a fresh bout of short-covering has the potential to lift the cross further beyond the 130.30 intermediate resistance towards reclaiming the 131.00 round figure mark – 38.2% Fibo. level.
Meanwhile, technical indicators on the 1-hourly chart have been gaining positive traction but are yet to catch up with the up-move on 4-hourly/daily charts, making it prudent to wait for a sustained move beyond the mentioned handle before positioning for any further appreciating move.
On the flip side, immediate support is pegged near the 129.50-45 horizontal zone, which if broken might negate prospects for any further recovery and accelerate the slide towards the 129.00 handle en-route the 128.70 support before the cross eventually aims back towards the 128.00 round figure mark.
GBP/JPY 1-hourly chart
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