GBPJPY Rallies Towards New 44-Month High, Next Stop At 160.00

Technical analysis of Forex market

GBPJPY posted six straight green days and today is continuing the bullish rally towards a fresh 44-month high around 156.57.

The pair jumped well above the medium-term descending trend line and any closing candle beyond the previous high of 156.50 could endorse the positive bias.

Technically, despite the fact that the stochastic oscillator is standing in the overbought region, the index is creating a bullish crossover within the %K and %D lines, pointing upwards. Also, the RSI is surpassing the 70 level with strong momentum. In trend indicators, the red Tenkan-sen line is moving above the blue Kijun-sen line and the price is standing above the Ichimoku cloud.

Looking for resistance levels, some stabilization is expected to occur around the 160.00 psychological level, registered in June 2016. Above this crucial line, the high from April 2016 at 162.80 may halt the bullish moves.

In the event of a downside reversal, the spotlight will fall back to the 152.80-153.40 support area, which has been quite active from August onwards. If this fails to hold this time, the bears may push for a close below the Ichimoku cloud, moving towards the 23.6% Fibonacci retracement level of the upward wave from 129.30 to 156.06 at 149.75.

Summarizing, GBPJPY could extend its trendline breakout towards the 160.00 handle though some caution is required as the pair is trading near the overbought territory.