Can it break 2021 highs?
Last weeks breakout following a long period of consolidation has seen GBPJPY make strong gains to the upside and it’s about to face its first big test.
The pair has previously seen support and resistance around 154.50 and we appear to be seeing that once more as it pushes for a fifth consecutive day of gains.
The stochastic and MACD on the 4-hour chart suggest that after such a strong run, the rally is losing momentum rapidly, which may indicate that a correction is due.
If we do see further profit-taking and a correction then the first test below could come around 153.75, with a break of this drawing attention back to 152.50, where it saw strong resistance throughout September. This would also fall around the key Fibonacci levels for the recent lows to highs.
A move above 154.50 could see it target the May highs around 156 but again, the momentum indicators will be key, especially if we continue to see divergences, which wouldn’t bode well for its potential to break new highs.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Craig Erlam
Latest posts by Craig Erlam (see all)
- GBP/USD – Dollar slips on dovish Fed - 23 March 2023
- Market Insights Podcast (Episode 448) - 23 March 2023
- A dovish shift from the Fed - 23 March 2023