GBPJPY, H4
As I stated on Monday and Tuesday’s post: “EURGBP has been trending moderately lower over the last three weeks, while today pair broke month’s support at 0.8770. Today’s negative momentum has been extremely high, with pair moving 50 pips lower so far, breaking outside Daily Bollinger Band pattern and creating a Bearish rounding top. Hence it is currently retesting the next support level at 0.8745, while the 2nd support comes down to January’s low at 0.8690. ” Today, EURGBP hit the immediate support level at 0.8745 on labour date release, while the extension to the downwards of the Bollinger Bands pattern along with the strong bearish candles and the increase in negative momentum, suggest that pair is likely to drift lower down to January’s low at 0.8690.
Pound jumped higher today, due to after stronger earnings numbers, with the 10-year jumping to an intraday high of 1.5385%, well past the high from Monday seen in the wake of the announcement on a Brexit transition deal. Average wage growth excluding bonuses lifted to 2.6% in the three months through January, as the jobless rate dropped to 4.3% to match the lowest since 1975. The FTSE 100 meanwhile extended further down after the numbers, which will add to the arguments for further tightening from the BoE.
Meanwhile all pound crosses presented similar performance as EURGBP. GBPJPY reached the 50-DAY EMA at 149.65, after the consolidat-ion seen yesterday around 149.10 area. The pair is in an uptrend since March 2, while it is holding above the significant 200-DAY EMA at 148.40 support level, this week. It is worth mentioning that in the intra-day picture, price came under pressure following the bounce off the 140.11 on yesterday’s session and hit the 149.77 resistance level.
Technically-wise, the momentum indicators, in the 4-hour chart, present positive movement for the asset. The RSI is at 64, rebounding from neutral zone,suggesting that the market has further space to cover to the upside. The MACD oscillator supports this view in the positive territory, while Stochastic crossed the overbought area. and is currently embraced by its trigger line.
Moreover, If prices continue to head higher , with a break of the latest fractal at 149.77, then the bullish scenario will be strengthened, with next area to be retest at 150.20. This level was also the resistance level in February.
Oppositely, a bearish scenario for the pair could be consider possible only with the break of the immediate support level at 148.50, which is a confluence f 20 and 50-period MA in the 4-hour chart.
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Andria Pichidi
Market Analyst
HotForex
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