GBP/JPY Clears January Range to Push RSI Towards Overbought Zone
GBP/JPY clears the January range to register a fresh yearly high (190.08), with the recent rally in the exchange rate pushing the Relative Strength Index (RSI) towards overbought territory.
GBP/JPY Outlook
GBP/JPY moves away from the 50-Day SMA (184.68) as it extends the advance from the start of the month, and a move above 70 in the RSI is likely to be accompanied by a further rise in the exchange rate like the price action from last year.
A close above 189.00 (38.2% Fibonacci extension) may push GBP/JPY towards the 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) region, with the next area of interest coming in around 195.28 (August 2015 high) to 195.70 (61.8% Fibonacci extension).
However, the RSI may show the bullish momentum abating if it struggles to push into overbought territory, with a move below 186.60 (50% Fibonacci extension) bringing the monthly low (185.24) on the radar.
--- Written by David Song, Strategist
GBP/JPY Outlook
GBP/JPY moves away from the 50-Day SMA (184.68) as it extends the advance from the start of the month, and a move above 70 in the RSI is likely to be accompanied by a further rise in the exchange rate like the price action from last year.
A close above 189.00 (38.2% Fibonacci extension) may push GBP/JPY towards the 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) region, with the next area of interest coming in around 195.28 (August 2015 high) to 195.70 (61.8% Fibonacci extension).
However, the RSI may show the bullish momentum abating if it struggles to push into overbought territory, with a move below 186.60 (50% Fibonacci extension) bringing the monthly low (185.24) on the radar.
--- Written by David Song, Strategist