USD/JPY, GBP/JPY Price Outlook: Positive Reversal as Support Holds
GBP/JPY and USD/JPY Forecast
GBP/JPY – USD/JPY- Reversing From New Lows
On Monday, both British Pound and US Dollar weakened against Japanese Yen, with GBP/JPY testing its lowest level in over two and half years at 126.55. Meanwhile, USD/JPY printed 105.05 – Its lowest level in over seven months.
This week the Relative Strength Index (RSI) climbed above 30 on GBP/JPY, then moved for the first time since the start of the month outside of the oversold territory, highlighting the weakened downtrend momentum. On the other hand, the oscillator rebounded from 30 then pointed higher to 43 on USD/JPY indicating to the seller’s loss of control.
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GBP/JPY DAILY PRICE CHART (DEC 8, 2016 – AUG 15, 2019) Zoomed out
GBP/JPY DAILY PRICE CHART (April 15 – AUG 15, 2019) Zoomed IN
Looking at the daily chart, we notice on Monday GBPJPY U-turned nearby the low end of current trading zone 126.77 – 128.80 closing above and eyeing a test of the high end.
Today, the pair is testing the high end of the zone for the second time this week. Hence, a close above this level could push the price towards 130.84. Although, the weekly resistance levels underlined on the chart (zoomed in) need to be watched along the way. See the chart to know more about the higher trading zone with the weekly resistance levels buyers may encounter in a further bullish move.
In turn, any failure in closing above the high end of the zone could send the price towards the low end. Further close below the low end may press the GBPJPY towards 125.50. However, the weekly support levels underscored on the chart should be kept in focus.
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USD/JPY DAILY PRICE CHART (JAN 22, 2018 – AUG 15, 2019) Zoomed out
USD/JPY DAILY PRICE CHART (March 21 – AUG 15, 2019) Zoomed in
Looking at the daily chart, we notice on Tuesday USDJPY reverted back to the same old trading zone 105.50 -107.30 eyeing a test of the high end.
Thus, a close above the high end of the zone could push the price towards 108.61. Nonetheless, the weekly resistance levels marked on the chart (zoomed in) would be worth monitoring.
On the flip-side, any failure in closing above the high end could lead the price towards the low end of the zone. Further close below the low end could see USD/JPY trading even lower towards 104.77. The weekly support level at 105.00 handle should be watched closely.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.