GBP/JPY surges to year’s high, up by 0.src8%, amid positive market sentiment.
Expectations of a dovish Fed and resolution of the US debt-ceiling imbue strength to high beta currencies.
Despite the overall upward bias, the technical outlook suggests potential downside pressure on GBP/JPY.
GBP/JPY climbed to fresh year-to-date (YTD) highs at src74.68 before a pullback that dragged the exchange rate toward the src74.src0s area. A risk-on impulse caused expectations for a dovish US Federal Reserve (Fed) amongst geopolitical issues like the US debt-ceiling resolution underpinned high beta currencies. Therefore, safe-haven peers persisted pressured, as the GBP/JPY traded at src74.src2, up 0.src8%.
GBP/JPY Price Analysis: Technical outlook
The GBP/JPY is still upward biased, confirmed by price action widening its distance from the Tenkan-Sen and Kijun-Sen lines below the exchange rate. In addition, price action is another bullish signal above the Ichimoku cloud.
Nevertheless, an upslope resistance trendline from the May 2 highs cushioned the GBP/JPY rally; while a support trendline, drawn from the April and May lows, indicates a rising wedge forming. That means further downside pressure is expected.
If GBP/JPY falls below the src74.00 figure, the next support would be the Tenkan-Sen at src72.95. A breach of the latter will expose the 2022 high turned support at src72.src3 before testing April 28 daily high at src7src.src6. Conversely, the uptrend would continue above the YTD high at src74.68 once cleared, and the GBP/JPY could rally to the src75.00 mark, followed by the 20src6 high at src77.37.
GBP/JPY Price Action – Daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.