GBP/JPY traded higher on Wednesday, after it hit support near the 135.66 level during the Asian morning. Overall, the pair continues to trade within the upside channel that’s been containing the price action since June 23rd, and thus, we would consider the near-term outlook to be positive.
Nevertheless, in order to get more confident on larger bullish extensions, we would like to see a decisive break above 136.61, a resistance marked by the highs of July 22nd and 23rd. Such a move would confirm a forthcoming higher high on both the 4-hour and daily charts, and may initially pave the way towards the 137.43 barrier, identified as a resistance by the high of June 10th. Another break, above 137.43, could extend the advance towards the high of the day before, at around 138.23.
Taking a look at our short-term oscillators, we see that the RSI rebounded from near its 50 line, while the MACD although fractionally positive, is still flat and very close to its trigger line. The RSI detects positive momentum, but bearing in mind that the MACD is yet to suggest so, we would prefer to wait for a move above 136.61 before examining the case of a trend resumption.
On the downside, a dip below 135.12 may signal that the bears have gained the upper hand. The rate will already be below the lower end of the channel, and we may see declines towards the 134.12 territory, which provided decent support between July 14th and 17th. Slightly lower we have the 133.70 support, which is marked by the low of July 3rd.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.