Japanese Yen, USD/JPY, GBP/JPY – Talking Points

  • USD/JPY has pulled back from multi year highs as it forms a new range
  • GBP/JPY momentum signals are mixed for now as it goes sideways
  • Japanese Yen has consolidated against USD and GBP. Will it break-out?

USD/JPY – Technical Analysis

Since making a high at 114.701, USD/JPY has been in a consolidation phase. It moved out of the ascending channel and has moved sideways. That high was just below the late 2017 high of 114.735.

In this period of consolidation, it moved below the 10-day simple moving average (SMA) but remained above the 21-day, 34-day and 100-day SMAs. The 10-day SMA also went from positive to negative gradient. That gradient has just turned positive again.

A bullish triple moving average (TMA) formation requires the price to be above the short term SMA, the latter to be above the medium term SMA and the medium term SMA to be above the long term SMA. All SMAs also need to have a positive gradient.

With the 10-day SMA gradient turning positive, conditions have been met for a bullish TMA. It should be noted though that past performance is not indicative of future results.

Support might be found at the previous lows of 113.256 and 113.004. Below that, the pivot points at 112.079 and 110.802 are potential levels of support.

On the topside, the recent high and the 2017 high at 114.701 and 114.735 respectively, may offer resistance.

USD/JPY CHART

Chart created in TradingView

GBP/JPY – Technical Analysis

After making a high last month at 158.219, GBP/JPY has retraced to a low of 154.668 as it consolidates above a previous high of 153.444.

The low of 154.668 is just above the 38.2% Fibonacci retracement level of 154.519. These 2 points may provide support.

The retracement saw GBP/JPY move below the 10-day SMA but remain above the 34-day and 100-day SMA. This might suggest a pause in short-term bullish momentum but medium and long-term bullish momentum might evolve.

Looking below, the pivot points at 153.444, 152851 and 152.572 are potential support levels. The 100-day SMA, currently 152.683, lies within those levels and may also provide support.

On the topside, the recent previous highs at 157.773 and 158.219 could offer resistance.

GBP/JPY CHART

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

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