Technical Analysis – GBPJPY retests top of range despite PM Johnson’s hospitalization

Christina Parthenidou, XM Investment Research Desk

GBPJPY sped up towards the top of its range on the four-hour chart on Monday after officials eased fears over Boris Johnson hospitalization.

A closure above the 134.47 resistance, which is also the 50% Fibonacci of the bearish wave from 144.94 to 124.00, and more importantly above the 200-period simple moving average (SMA), could prove valuable to the market, confirming the bullish signals the upward-sloping RSI and the fast Stochastics are currently providing.

Such an event could drive the price up to the 61.8% Fibonacci of 136.94 if the 136.00 round level turns out to be a weak obstacle, while beyond the former, the door would open for the 138.80 barrier.

In the negative scenario, a drop below the 132.00-132.50 supportive area which involves the 23.6% Fibonacci could bring the bears back into play, shifting the spotlight towards 130.40. Lower and below the Ichimoku cloud, the sell-off could next stall somewhere between the 23.6% Fibonacci of 128.94 and the 128.15 number.

In brief, GBPJPY is currently in a range and only a break above the 134.47 ceiling could restore bullish appetite, while a close below 132.00 could put the pair back on a bearish path.