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
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