- Continued with its struggle to sustain/build on the momentum beyond 100-DMA.
- Any meaningful pullback might continue to attract dip-buying near the 134.00 mark.
The GBP/JPY cross on Tuesday finally broke out of its overnight consolidative trading range and spiked to near two-month tops, beyond the key 135.00 psychological mark, albeit struggled to sustain/extend the momentum further beyond 100-day SMA.
The mentioned barrier coincides with 38.2% Fibonacci retracement level of the steep decline from the vicinity of the 149.00 handle to multi-year lows – near mid-1.2600s – and should now act as a key pivotal point for the pair’s next leg of a directional move.
Given that technical indicators on hourly charts have already eased from slightly overbought conditions and maintained their bullish bias on the daily chart, the set-up remains in favour of bullish traders and support prospects for an extension of the positive move.
However, traders are likely to wait for a sustained move beyond the overnight swing higher – around the 135.40-45 region – before positioning for any further near-term appreciating move towards the 136.00 round-figure mark en-route 136.70-80 resistance zone.
On the flip side, any meaningful pullback might continue to attract some dip-buying interest and should help limit the downside near the 134.00 handle, which if broken might prompt some additional profit-taking and accelerate the slide further towards the 133.10-133.00 support.
GBP/JPY daily chart