The GBPJPY pair is off to a fresh start this week with a bullish candlestick, signaling the end of a short-term decline of two consecutive bearish sessions. As of now, the exchange rate is hovering slightly above the support level of 191.315 and is showing signs of gaining momentum to reach the resistance level of 193.533.
Overview
The GBPJPY pair is off to a fresh start this week with a bullish candlestick, signaling the end of a short-term decline of two consecutive bearish sessions. As of now, the exchange rate is hovering slightly above the support level of 191.315 and is showing signs of gaining momentum to reach the resistance level of 193.533.
Traders will be closely monitoring the currency pair due to the release of significant economic data later today that could potentially impact the currency valuations.
Upcoming Economic Events
Wednesday 12:30 am (GMT): Consumer Price Index y/y (AUD)
Thursday 12:30 pm (GMT): Gross Domestic Product m/m (CAD)
Thursday 12:00 pm (GMT): Final GDP q/q (USD)
Thursday 12:30 pm (GMT): Unemployment Claims (USD)
Thursday 02:00 pm (GMT): Pending Home Sales m/m (USD)
Thursday 02:00 pm (GMT): Revised UoM Consumer Sentiment (USD)
Friday 12:30 pm (GMT): Core PCE Price Index m/m (USD)
Technical Analysis
Since January 5, 2021, the GBPJPY currency pair has been following an upward trajectory. Specifically, the exchange rate failed to establish a trough below 178.335 and instead marked a higher trough at 178.726, indicating a lack of bearish strength to push the price any lower. Subsequently, the exchange rate exceeded the top at 184.175, signifying the end of the downtrend and the beginning of a new trend in the opposite direction, thereby forming an uptrend. After reaching the initial target of 187.557, the currency pair has been trading in an uptrend channel bounded by the basic and return lines.
The Moving Average indicator and the Momentum oscillator both agree with the bullish bias. Specifically, the prices are currently trading above the 50-period Moving Average while the Momentum oscillator remains above its baseline. However, upon closer examination, it becomes apparent that a negative divergence between the price and momentum is present, which serves as a warning of a potential downturn.
Potential Upside Targets
Should the buyers maintain control of the market, it will set the stage for the exchange rates to rise.
191.315: The first price target is observed at 191.315, representing the high price of the candlestick formed on February 26.
193.533: The next price objective can be estimated using the peak formed on March 20.
195.220: Similarly, the third target is calculated at the R2 resistance utilizing the weekly Pivot Points.
Potential Downside Targets
If the sellers manage to take control of the market, then traders may consider the following targets:
188.983: The first price target is observed at 188.983, representing an internal trendline.
187.957: The next price objective can be estimated using the trough formed on March 11.
184.981: Finally, the third target is calculated at the S2 support utilizing the weekly Pivot Points.
Conclusion and Considerations
In conclusion, the GBPJPY is following an upward path toward the 193.533 resistance level. Failure to do so could set the stage for a decline to the 189.00 zone. To make the most of their investments and avoid potential risks or losses, traders must stay up-to-date with the latest geopolitical and economic developments. Exercise caution and maintain a sharp eye on market trends.