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  • GBP/JPY built on the overnight bounce and gained some follow-through traction on Wednesday.
  • Mixed technical indicators on hourly/daily charts warrant caution before placing fresh bullish bets.

The GBP/JPY cross edged higher through the first half of the European session and refreshed daily tops, around the 139.00 mark in the last hour. The mentioned level coincides with 200-hour SMA and a sustained move beyond will set the stage for additional gains.

Meanwhile, technical indicators on the 1-hourly chart have again started moving into the bullish territory and favour bullish traders. However, neutral oscillators on 4-hourly/daily charts warrant some caution before positioning for any further appreciating move.

This makes it prudent to wait for some follow-through strength beyond weekly tops, around mid-139.00s, above which the GBP/JPY cross could aim back to reclaim the key 140.00 psychological mark. The momentum could further get extended towards the 140.30-40 heavy supply zone.

On the flip side, the 138.50-45 region now seems to protect the immediate downside. This is followed by the overnight swing lows, around the 138.00 round-figure mark. A convincing break below will negate any near-term positive bias and prompt some technical selling.

The GBP/JPY cross might then turn vulnerable to accelerate the fall to retest sub-137.00 levels, or weekly lows touched on Monday. The next relevant support is pegged near the 136.55 region, marking a three-month-old ascending trend-line, which should act as a strong base.

GBP/JPY 1-hourly chart

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Technical levels to watch