GBP/JPY trades to a fresh yearly high (191.32) as it extends the rally from last week, with the Relative Strength Index (RSI) flirting with overbought territory as it climbs to its highest reading since November.
GBP/JPY Outlook
At the same time, the 50-Day SMA (185.89) now reflects a positive slope following the three-week rally in GBP/JPY, and a move above 70 in the RSI is likely to be accompanied by a further advance in the exchange rate like the price action from last year.
A break/close above the 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) region may push GBP/JPY towards the 195.28 (August 2015 high) to 195.70 (61.8% Fibonacci extension) area, but the RSI may show the bullish momentum abating should if struggle to push into overbought territory.
Failure to test the 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) region may push GBP/JPY back towards the former-resistance zone around the November 2015 high (188.81), with a close below 186.60 (50% Fibonacci extension) bringing the monthly low (185.24) on the radar.
--- Written by David Song, Strategist
GBP/JPY Outlook
At the same time, the 50-Day SMA (185.89) now reflects a positive slope following the three-week rally in GBP/JPY, and a move above 70 in the RSI is likely to be accompanied by a further advance in the exchange rate like the price action from last year.
A break/close above the 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) region may push GBP/JPY towards the 195.28 (August 2015 high) to 195.70 (61.8% Fibonacci extension) area, but the RSI may show the bullish momentum abating should if struggle to push into overbought territory.
Failure to test the 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) region may push GBP/JPY back towards the former-resistance zone around the November 2015 high (188.81), with a close below 186.60 (50% Fibonacci extension) bringing the monthly low (185.24) on the radar.
--- Written by David Song, Strategist