GBP/JPY continues to march higher, what next?

Technical Analysis

Author: Justin Low | gbpjpy

The pair has been trending higher following a break of the 100-day MA


After shaking off the resistance at the 100-day MA (red line), the pair has been marching higher and looks set for further gains at this point.

A break above the 23.6 retracement level on the daily chart sees the pair continue its momentum to the topside, and despite Friday's reversal in the US session the pair is staying bid still.

The next level to watch out for in the pair is the February high of 154.05, and following which is the year's high of 156.61. Those are levels to watch out for to the upside.

In terms of the downside move, support levels fall back to the 100-day MA @ 150.92 currently followed by the 200-day MA (blue line) @ 148.82.

The key risk events for sterling will come from data points (jobs report, inflation report, retail sales) as well as potential Brexit headwinds - House of Lords to debate on the Brexit bill on Wednesday (thanks to Hmm for the links in the earlier thread).

Meanwhile, for the yen it'll rely heavily on risk sentiment in equities - which means geopolitical news will be the risk here. Right now, the market is staying relatively calm on Syria but the question from the missile attacks will be how will this impact US-Russia relations? That should keep markets from getting too carried away for the time being.

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