GBP/JPY is a great example of a recent momentum shift the last two weeks after months of chopping around. Traders generally refer to the currency cross as the ‘Dragon’. In October, it skyrocketed more than 2% per business day against the Japanese Yen (JPY). The broad move to the topside accelerated further once GBP/JPY reestablished itself above the 50-day Exponential Moving Average (EMA) at the 199.85 level. Banning cast an important pivotal moment for traders.
Over the past week or so, GBP/JPY rocketed quickly up to the 205.00 level before showing signs of a pullback. The duo broke down under the 50-day EMA in late September. Support, but over the past couple of days, there was very strong buying support in the 197.00 area. Market analysts are siding with the bullish scenario, expecting a decisive GBP/JPY breakout above 205.00 to lead towards a retest of the summer highs. Alternatively, a firm close below 199.50 could indicate loss of bullish momentum and a reversion to a larger trading range.
Recent Performance and Key Levels
Recent pattern of GBP/JPY just as indicates it is trading above all vital relocating averages. All this points to buyers having the advantage at the moment. On Monday, this currency pair showed signs of strength. It took a breather around the 203.00 figure after bouncing from the two-day drop that ensued after its 15-month peaks beyond 205.00.
Traders remain focused on two key resistance levels: the immediate resistance at 205.00 and the longer-term support provided by the 200-day EMA, which is trending upward near 196.77. Holding above the 50-day EMA suggests bullish sentiment in the short term, as GBP/JPY continues to trade above the psychological barrier of 200.00.
Speculators are getting bullish on GBP/JPY. The optimistic price forecast can push USDCAD to retest the 205.00 resistance level again, which shows the bullish mood in the crypto market. If it can pull off a miracle, the summer highs may not be entirely out of reach. That would make for a major coup for the duo.
Market Sentiment and Trader Insights
Today’s overriding market mood is one of optimism with GBP/JPY remaining high riding the crest of a medium term bullish wave. Traders are watching the pair’s every move with watchful eyes. They are particularly interested in its response to the newly established resistance level at 205.00.
As we experienced in GBP/JPY, the recent volatility has caught the attention of many traders looking to pounce on moves and shifts in direction. If the pair’s capacity to maintain its ground over some key social, technical levels is any indication, there’s huge buyer participation on the market. Their energetic involvement sets the stage for productive advocacy victories in the future.
A GBP/JPY close below 199.50 may warn of decaying momentum, some analysts warn. Such a change might lead to more beneficial changes in market behavior. Either outcome would likely result in a lengthy consolidation, or worse, a pullback to prior range lows.