Key Resistance Ahead for GBP/JPY

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Key Resistance Ahead for GBP/JPY

GBP/JPY has been bullish since making a low on the year at 174.87. Let’s follow up with the rally as it tagged 181.00 and approaches a key resistance.

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The 4H chart shows the GBP/JPY rallying in a rising channel. The moving averages have flattened and price is above all three, 200-, 100-, and 50-period SMAs. This shows a market shifting from bearish at least to a sideways mode if not bullish. The RSI pushing above 70 suggests the same thing.

Now, if price can hold above 178 and thus respect the cluster of SMAs as support and if the RSI can stay above 40, thus showing maintenance of bullish momentum, then we can start considering a bullish market.

This week, if GBP/JPY were to become bullish, it needs to jump the 182 hurdle and clear a falling trendline coming down from last week’s high of 189.71 as we can see in the daily chart.

Essentially the market is bullish above 182, especially if the market shows support around 178. GBP/JPY is neutral between 178 and 182, and bearish below 178, especially if the market fails to clear 182.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.