GBP/JPY edged north on Monday, after it hit support near the 144.40 zone on Friday. The move confirmed a higher low on the 4-hour chart, which combined with the fact that the rate continues to trade above the tentative upside support line drawn from the low of the 15th of August suggest that there is room for some further recovery, at least towards Thursday’s peak, at around 146.00.
Having said that though, we would like to see a decisive break above the 146.30 zone, defined by the inside swing low of the 14th of November, before we get confident on larger bullish extensions. Such a break could encourage the bulls to drive the battle all the way up to the 147.95 barrier, marked by the peak of the 15th of November.
Looking at our short-term oscillators, we see that the RSI emerged above its 50 line and continues to point up. The MACD has just poked its nose above both its zero and trigger lines. These indicators suggest that the momentum has shifted to positive and support the notion for the pair to continue traveling north for a while more, at least towards 146.00 or 146.30.
On the downside, we would like to see a clear dip below 144.00, the low of the 20th of November, before we start examining whether the bears have gained the upper hand. Such a dip could confirm the break of the aforementioned medium-term upside support line and may initially aim for the 143.35 support territory. Another break below 143.35 could set the stage for more bearish extensions, perhaps towards the low of the 26th of October, at around 142.80.
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. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers 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 analyzes 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 analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.
68% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.