GBPJPY extended its rally and successfully breached strong resistance at 153 to hit its highest level since mid-2016 at 153.51. The short-term bullish bias remains intact, however, there is some risk of a pullback since the market has become overextended. Both RSI and the stochastic indicators are now in or close to overbought levels on the 4-hour chart.
There is little change in the bigger picture and GBPJPY remains in a broad consolidation range between 147–153 since mid-September. More signals are needed to indicate that today’s breach above 153 can be sustained. Near-term price action may turn neutral since the market is overbought on the 4-hour chart.
Support is expected at 153 and dropping below it would place the market back in a range, with soft support seen at 152 and 151 ahead of 150.
GBPJPY retains a bullish undertone overall, however the fact that short-term momentum indicators reached overbought levels is suggestive of a potential loss in momentum.
