- Some near-term profit-taking exerts some pressure for the second consecutive session.
- Any meaningful slide is likely to remain limited and attract meaningful dip-buying interest.
The GBP/JPY cross traded with a mild negative bias for the second consecutive session on Tuesday, albeit remained well within the previous session’s broader range and has also managed to hold above the 134.00 handle.
Given the recent strong upsurge of over 800-pips, traders seemed now seemed inclined to take some profits off the table and seemed to be a key factor behind a weaker trading sentiment through the early European session.
Meanwhile, technical indicators on the 1-hourly chart have drifted into the negative territory but maintained their bullish bias on 4-hourly/daily charts, supporting prospects for some meaningful dip-buying interest at lower levels.
This coupled with the fact that the cross is holding comfortably above important intraday moving averages – 100 & 200-hour SMAs – further add credence to the constructive outlook amid receding fears of a no-deal Brexit.
Hence, any subsequent slide below the 134.00 handle might still be looked upon as an opportunity to initiate fresh bullish positions and help limit the downside near a previous resistance breakpoint around mid-133.00s.
On the upside, bulls are likely to wait for a sustained move beyond the key 135.00 psychological mark and a follow-through move above the 135.15-20 region (100-day SMA) before positioning for any further appreciating move.
GBP/JPY 1-hourly chart