Summary:
- GBPJPY pulled back to the upper limit of the upward channel
- Potential upward movement may take pair as high as to 153 handle
- Resistance zone around 149 handle halted previous upward impulse
During the past two weeks we could observe elevated volatility on the GBP tied FX pairs due to new developments in Brexit case. The British pound erased previous gains partially. GBPJPY pulled back towards the upper limit of the upward channel following recent break higher. This move can be seen as the retest of recently broke resistance and may serve as a base for extending recovery. The pair is also trading above 50- and 100-week moving average what can be seen as a sign of demand-side domination as well.
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Source: xStation5
Moving onto a daily frame one can see that upward movement was halted after reaching 148.7-149.0 resistance zone. Subsequent declines were quite rapid but bears were fend off in the vicinity of 200-session moving average. Range of the latest upward movement (red rectangles) suggests that there is a scope for an upward move even towards the 153 area. In the very same spot one can also find resistance zone marked by local highs from the first half of 2018.
Source: xStation5
On the H4 interval GBPJPY trades within the 50-period moving averages channel and below the downward sloping trendline. The latest sell-off was halted by the combination of 200-period moving average (green rectangle) and 61.8% Fibo level of the latest major upward impulse. Break above the aforementioned trendline and successful attack on levels marked by latest local highs could pave the way towards resistance level from the daily interval.
Source: xStation5
