- GBP/JPY trades flat on Monday and stalls ahead of 140.00.
- The price has all met some resistance at the previous wave high.
GBP/JPY daily chart
GBP/JPY has been trending over the past five sessions but on Monday the price has met some resistance. JPY is traditionally a safe-haven currency and GBP moves have been dominated by the risk theme. This has led the pair to trade higher with the stock markets but the price has not continued with that theme today. Later in the week, there could be some volatility in the pair as the market gets the latest Bank of England rate decision and accompanying updates.
Looking at the chart, the price has also stalled at the 61.8% Fibonacci extension zone. The area is also very close to the previous wave high at 139.74. It seems that the bulls have not managed to conjure enough momentum to test 140.00 for now. This does not mean the rally is over it just means there could be a small pullback before the trend continues.
The indicators might also support the theory above. The Relative Strength Index is in the overbought area and this means the price could move lower in the near term. The MACD is looking positive as the histogram is in the green and the signal lines are above zero.
Overall in the medium term, the price is still in an uptrend but if the market manages to break 139.74 then the uptrend would be fully back on. On the downside, the next major support is at 136.00 and a break below there could take the price to the channel low.
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