- GBP/JPY regained strong positive traction on Thursday and climbed back above the 142.00 mark.
- The technical set-up remains in favour of bullish traders and supports prospects for further gains.
- The emergence of dip-buying should help limit the downside near the 141.25 horizontal support.
Following the previous day’s sharp pullback of over 100 pips, the GBP/JPY cross caught some fresh bids on Thursday and jumped back above the 142.00 round-figure mark.
The emergence of some dip-buying favours bullish traders and supports prospects for a further near-term appreciating move. The positive outlook is further reinforced by the fact that the recent appreciating move over the past four months or so has been along an upward sloping channel.
Meanwhile, technical indicators on the daily chart maintained their bullish bias and are still far from being in the overbought territory. Hence, a subsequent positive move towards challenging the trend-channel resistance, around the 143.00 round-figure mark, remains a distinct possibility.
A sustained move beyond will mark a fresh bullish breakout. The GBP/JPY cross might then aim to surpass the 143.30-40 intermediate hurdle and reclaim the 144.00 mark. The momentum could further get extended towards 2020 swing highs, just ahead of the key 145.00 psychological mark.
On the flip side, any meaningful pullback might continue to attract some buying around the 141.25 horizontal resistance-turned-support. This is closely followed by the 141.00 mark, which if broken decisively might drag the GBP/JPY cross to the 140.45 level en-route the 140.00 mark.
GBP/JPY daily chart
Technical levels to watch