- Pound extends recovery versus yen but found resistance at 136.00 and 136.25.
- GBP/JPY bullish bias still in place, momentum eases.
The pound is rising for the fifth consecutive day versus the Japanese yen on Tuesday, as the recovery from the lowest in almost three months continues. The rally is showing signs of exhaustion as it failed to break Monday’s highs and also after being rejected from above 136.00 again.
The GBP/JPY will likely continue to consolidate between 135.00 and 136.00. If it manages to break and hold above 136.00 more gains seem likely. The first target is seen at 136.50 (20-day simple moving average) followed by 137.50/70.
If the current loss of momentum in GBP/JPY triggers a decline, the key support to watch is seen at the band 134.50/70. A break lower would increase the bearish pressure, suggesting a test of the September low at 133.00 (interim support at 133.75).
GBP/JPY 4-hour chart
