GBP/JPY attracts buyers for the second straight day and touches a fresh weekly high.
The overnight bounce from the 200-day SMA and subsequent move up favor bulls.
Dips to the 194.35 area could be seen as a buying opportunity and remain limited.
The GBP/JPY cross builds on the previous day's goodish rebound from the 192.75-192.70 area, or over a one-week low, and gains positive traction for the second straight day on Wednesday. The momentum lifts spot prices to a fresh weekly low during the first half of the European session, with bulls now awaiting a sustained strength beyond the 195.00 psychological mark before placing fresh bets.
From a technical perspective, the GBP/JPY cross once again showed some resilience near the very important 200-day Simple Moving Average (SMA), and the subsequent move-up favors bullish traders. Moreover, positive oscillators on the daily chart suggest that the path of least resistance for spot prices remains to the upside. Hence, some follow-through move-up towards the next relevant hurdle, around the 195.70 area, looks like a distinct possibility.
The GBP/JPY cross might then aim to surpass the 196.00 round figure and retest the May monthly swing high, around the 196.25-196.30 region. A sustained strength beyond the latter could be seen as a fresh trigger for bulls and lift spot prices to the 197.00 round figure for the first time since January. The momentum could extend towards the 197.40-197.50 hurdle en route to the 198.00 mark and the 198.25 region, or the year-to-date peak touched in January.
On the flip side, any corrective pullback now seems to attract some dip-buyers near the 194.35 region, or the daily trough. This, in turn, should help limit the downside for the GBP/JPY cross near the 194.00 round figure. Failure to defend the said handle could make the currency pair vulnerable to accelerate the downward trajectory towards 193.45 intermediate support en route to the 193.00 mark and the 192.70 region, or the pivotal 200-day SMA.
GBP/JPY daily chart
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