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GBP/USD, GBP/JPY Outlook: Will British Pound Resume Bullish Price Action?

GBP/USD, GBP/JPY Outlook: Will British Pound Resume Bullish Price Action?

2019-10-23 10:00:00
Mahmoud Alkudsi, Market Analyst
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GBP/USD and GBP/JPY Technical Forecast

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Paused Bullish Momentum

On Oct 11, GBP/USD buyers started a bullish move led the pair to 1.3012- its highest level in over five months. Same scenario happened with GBP/JPY printing 141.51 – its highest level in nearly five months. However, buyers showed hesitation this week pausing the uptrend move.

Yesterday, the Relative Strength Index (RSI) abandoned the overbought territory and crossed below 70, indicating to a weaker uptrend momentum.

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GBP/USD DAILY PRICE CHART (May 1, 2017 – Oct 23, 2019) Zoomed out

GBPUSD price daily chart 23-10-19 zoomed out

GBP/USD DAILY PRICE CHART (March 10 – Oct 23, 2019) Zoomed IN

GBPUSD price daily chart 23-10-19 zoomed in

From the daily chart, we notice the downtrend move paused on Sep 3. The price corrected higher on Oct 9 then started uptrend move two days after led the price to a higher trading zone 1.2785 – 1.2965. However, since the start of this week GBP/USD upward move has been losing momentum.

Thus, a close below the low end of the zone could lead GBPUSD towards 1.2550. Further close below this level could send the pair towards 1.2360. Nevertheless, the daily and weekly support levels underscored on the chart (zoomed in) should be watched along the way.

Having said that, a close above 1.3048 could resume bullish price action towards the vicinity of 1.3293-1.3300. In that scenario, the weekly resistance levels underlined on the chart would be worth monitoring.

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GBP/JPY DAILY PRICE CHART (Jan 4, 2017 – Oct 23, 2019) Zoomed out

GBPJPY daily chart 23-10-19 Zoomed out

GBP/JPY DAILY PRICE CHART (June 14 – Oct 23, 2019) Zoomed in

GBPJPY price daily chart 23-10-19 Zoomed in

Looking at the daily chart, we notice the downtrend move stopped on Aug 12 and corrected higher on Sep 3. Then, on Oct 11 GBP/JPY started a fresh uptrend move led the price to its highest level in over four months then paused after.

Yesterday, uptrend momentum slowed down as GBPJPY dropped to a lower trading zone 139.00 – 140.50 eying a test of the low end of it. Thus, a close below 138.88 could lead the pair towards the vicinity of 136.40-28. Further close below 135.55 would mean a possible correction of current uptrend and may lead the price towards the vicinity of 133.40-34. That said, the weekly and daily support levels underlined on the chart should be considered.

On the other hand, a close above the high end of the zone could open the door for GBPJPY to resume bullish price action towards the vicinity of 143.09-19. However, the weekly resistance levels and area marked on the chart should be kept in focus.

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.

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