GBP/JPY Under pressure, but risks skewed to the upside
Our preference: the downside prevails as long as 134.68 is resistance.
Alternative scenario: the upside breakout of 134.68, would call for 135.28 and 135.63.
GBP/JPY is looking north with the weekly chart reporting a bullish reversal pattern. The pair could soon rise above the immediate resistance at 135.67.
GBP/JPY is currently trading around 134.45, representing 0.45% loses on the day. The losses, however, could be short-lived,
as technical charts are reporting bullish conditions.
For instance, the weekly chart shows a bullish candlestick reversal pattern – the pair ended last week with 2.82% gains,
validating or confirming the bearish-to-bullish trend change signaled by the preceding week’s big bullish engulfing candle.
The doors, therefore, look open for a sustained break above the immediate resistance of July 25’s high of 135.67.
The breakout, however, may be preceded by a minor pullback to 134.00 if the equity markets trade in the red in Europe due to fears of the European Union (EU)-US trade tensions and concerns of a deeper economic slowdown in China.