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.
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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