GBP/JPY & EUR/JPY Charts Suggest Another Push Higher Coming
GBP/JPY & EUR/JPY Highlights:
GBP/JPY moving sideways within the context of an uptrend since late June suggests another push higher could come soon. A firm break above the June swing-high will likely have the area around 140.82 in play, a spot that acted as resistance and support from October to February.
A subsequent break beyond the above mentioned levels could open up room to trade to the February 2018 trend-line and a pair of peaks (~144.60), created before the coronavirus rout. All-in-all, this could mean another 500 pips is in store in the not-too-distant future.
To derail the current outlook, a breakdown is needed out of the neatly forming channel since late June (we’ll call it <~137.75). In the event this happens, the 200-day at 137.40 could come into play quickly, along with a parallel from the March low, currently around the 136.75 mark. This would be a big spot of support in the bigger picture.
GBP/JPY Daily Chart (breakout levels ahead)
GBP/JPY 4-hr Chart (rising within clean channel)
EUR/JPY recently recaptured a slope dating all the way back to 2012, a slope that had been tagged numerous times since then, including a couple of instances this year. It is a primary level of support on the daily, but drilling down to the 4-hr there is good short-term support within the context of a solid uptrend. Channel support intersects with an earlier-month high. This makes the current spot especially interesting for a continuation trade higher.
Additionally, there is a bull-flag building that if triggered will validate a hold of support, and should see EUR/JPY higher towards a trend-line from December 2014 and another minor swing-high from 2019. The area resides roughly at 127.50.
Even if the very near-term support fails, there is another strong spot to watch around 124.30 where the June high and recent pullback intersect with the trend-line off the May low. A hold there keeps the upside intact still, while a break could be a trend changer.
EUR/JPY Daily Chart (2012 slope support)
EUR/JPY 4-hr Chart (at support within channel)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.