GBP/JPY Price Analysis: Breaks through a three-day-old ascending channel hurdle

GBP/JPY gained some positive traction for the third consecutive session on Wednesday.
The momentum pushed the cross further beyond a three-day-old ascending channel.
The lack of follow-through, overbought RSI on the 1-hourly chart warrant some caution.

Haresh Menghani FXStreet

The GBP/JPY cross edged higher for the third consecutive day and jumped to near one-week tops, around the 136.45 region during the mid-European session on Wednesday.

The latest leg of a sudden spike in the last hour could be attributed to some technical buying on a sustained move beyond the top end a three-day-old descending channel. This comes on the back of the early resilience below 100-hour SMA and supports prospects for further intraday gains.

However, the lack of any strong follow-through buying questions the reliability of the breakout. This coupled with the fact that RSI (14) on the 1-hourly chart has just moved above the 70 mark further warrants some caution before placing any aggressive bullish bets, at least for now.

Hence, it will be prudent to wait for some follow-through buying beyond last week's swing high, around the 136.50-60 region, above which bulls are likely to aim to reclaim the 137.00 mark. The positive momentum could further get extended towards the 137.20-25 horizontal resistance.

On the flip side, the 136.00 round-figure mark now seems to protect the immediate downside and is closely followed by support near the 135.70 region (100-hour SMA). Failure to defend the mentioned support levels will negate any near-term bullish bias and prompt some fresh selling.

The cross might then accelerate the slide further towards the lower boundary of the mentioned channel, currently near mid-135.00s. Some follow-through selling will be seen as a fresh trigger for bearish traders and set the stage for a fall towards challenging the key 135.00 psychological mark.

GBP/JPY 1-hourly chart

Technical levels to watch

GBP/JPY

Overview
Today last price	136.26
Today Daily Change	0.36
Today Daily Change %	0.26
Today daily open	135.9

Trends
Daily SMA20	135.08
Daily SMA50	134.46
Daily SMA100	133.47
Daily SMA200	137.58

Levels
Previous Daily High	136.13
Previous Daily Low	135.32
Previous Weekly High	136.63
Previous Weekly Low	134.35
Previous Monthly High	139.74
Previous Monthly Low	131.77
Daily Fibonacci 38.2%	135.82
Daily Fibonacci 61.8%	135.63
Daily Pivot Point S1	135.44
Daily Pivot Point S2	134.98
Daily Pivot Point S3	134.64
Daily Pivot Point R1	136.25
Daily Pivot Point R2	136.59
Daily Pivot Point R3	137.06

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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