FOREX: GBPJPY – Bullish, Sets Up For More Gains

GBPJPY – With a firm hold above the 135.47 level seen and a challenge on further upside underway, GBPJPY looks to target the 142.00 level.  

This buttresses our call for the possibility of a follow through higher in our weekly analysis. Its new offensive is coming on the back of the resumption of its short term recovery initiated from the 122.40 level in Mid-Mar’2011.

On a decisive break and hold above the 142.00 level the cross will strengthen further towards the 145.95 level where its April 2010 high is located and possibly higher. Its weekly and daily RSI are bullish and pointing higher suggesting further gains.

Alternatively, on any pullback from its current price level, GBPJPY should target its Aug 03’2010 high at 137.75 with a breach of that level turning risk to the 135.47 level, its Feb 18’2011 high. We expect a reversal of roles as support at that level to turn the cross back up but if that level breaks, we should see further weakness towards  the 132.905 level, its Mar 22’2011high.

All in all, the cross remains biased to the upside and looks to strengthen further with the only risk being corrections along the way.

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