The GBPJPY has been under pressure since beginning the year as a combination of GBP weakness and JPY strength sent the pair lower. Not since Friday though. The pair has seen a correction higher that took it’s clues from technical support and today, on the breaking of some technical resistance targets.
GBPJPY price breaks above the 100 day MA at 179.56 today. Now risk for buyers.
On Friday, the pair found support against the 200 day moving average (green line in the chart above). The moving average came in at 175.885 . While the low for the day extended to 175.778, the break below the key MA line was only for a few minutes. The selling started to turn around at that point.
The rally higher on Friday stalled near the 100 hour moving average (blue line in the chart below). In yesterday’s holiday-like trading, the pair traded above and below the moving average level.
However, in trading today, the better-than-expected China GDP data and stronger equities has led to a weakening of the JPY and given the pair the needed push higher. The pair initially rallied and tested the 200 hour moving average (green line in the chart below) at 178.73. After a few hours of consolidation, the pair broke through that moving average and accelerate higher. In the process, the market price has also been able to break above the 100 day moving average (see blue line in the daily chart above). That level comes in at 179.563 and will now be a risk, defining level for bullish/long traders in trading today and going forward.
The next major target for the pair comes in against the 180.356 level. This is the 38.2% retracement of the move down from the December 29 high to the January 16 low. Look for sellers on a test of the level in trading today. The range today is around 255 pips while the 22 day average is 169 pips. So the move is a little long in the tooth and that should make the next steps – at least in trading today – more difficult.
GBPJPY on the hourly chart.
Looking at the 5 minute chart, the pair has accelerated higher after breaking above the 200 hour MA at 178.73 level (at the time). The momentum is fading though as the trend channel loses some of the slope on the last leg higher. The pair could be in for a period of consolidation. Look for support on a correction near the 179.58-179.41 area now. The 179.58 was a stall area on the move higher and the 100 day MA is at the 179.56 level. The 179.41 is the 38.2% of the move higher in trading today. If the trend move is to continue today and going forward traders would like to see that close above the 100 day MA.
GBPJPY on 5 minute losing some momentum
