GBPJPY surged sharply higher this week and during today’s trading session it reached a fresh 19-month high of 156.60. Prices have broken above the 156.00 handle for the first time since June 2016. The bullish picture in the short-term chart is further supported by the technical indicators.
From the technical point of view, the Relative Strength Index (RSI) is flattening in the positive territory and is approaching the overbought area. Also, the MACD oscillator is holding in the bullish area with weaker momentum than before. However, in the 4-hour chart, the 20-simple moving average posted a bullish crossover with the 40-SMA, indicating further gains.
If price action remains positive, there is scope to test the 160.00 strong psychological level taken from the peak in June 2016, while the price is currently trading slightly lower.
If the price creates a bearish correction, then the focus could shift to the downside towards the 23.6% Fibonacci retracement level around 154.30 of the up-leg from 147.00 to 156.60. If this level is breached, it could increase downside pressure until the 38.2% Fibonacci mark at 152.90.
