GBPJPY has firmed up and turned more bullish after breaking above the key 152 level on December 7. However, the rally off the 150 area has now stalled at 153.40 after the market became overextended.
On the 4-hour chart the RSI reached overbought levels at 70 and due to weaker momentum in the market, GBPJPY will likely consolidate in the near term or might even see a deeper pull back.
To the downside, strong support is now being provided at 152. If it fails to hold, then prices could fall to 150 and place the pair back into the medium-term range from late September. An extension below 150 would erase the near-term bullish bias.
For now, risk is still skewed to the upside. As long as GBPJPY can sustain trading above 152, then this could be the start of a new bullish phase, with scope to extend towards the 160 handle.
The bullish crossover of the 50 and 200-period moving averages are supporting the bullish outlook.
