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GBP/JPY is trying to rise from knees


FXStreet (Moscow) - GBP/JPY took off from Asian low at 170.86 and made its way above 171.00 on short covering

Will the sun shine over GBP/JPY again?

GBP/JPY attempts to reverse heavy losses of the previous week crashed against GBP sell-off across the board. Obviously, GDP weakness is more powerful that JPY decline now. It means that during European session the fate of the cross will de defined by broad sentiments towards UK currency. Though the UK macroeconomic calendar is empty today, which gives us hope that GBP bears will leave the currency in peace for a while and allow the cross to recover from deeply oversold levels. Now that GBP/JPY is above 171.00, upside correction may gain traction towards initial target of 171.44

What price levels and patterns have to be considered?

Spot is presently trading at 171.12, and next resistance can be seen at 171.19 (Hourly 20 EMA), 171.22 (Daily High), 171.44 (Hourly 100 SMA), 171.46 (Daily Classic PP) and 171.79 (Weekly Classic PP).

Next support to the downside can be found at 170.91 (Daily Open), 170.91 (Monthly Low), 170.91 (Weekly Low), 170.89 (Daily Low) and 170.86 (Yesterday's Low).

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