- GBP/JPY accumulates mild gains on Monday in the initial European session.
- Bulls fear the formation of a Doji candlestick near five-year highs.
- Momentum oscillators hold onto the overbought zone, throw caution for aggressive bids.
The GBP/JPY cross-currency pair posts gains for the eight-straight session. The pair seems exhaustive near the five-year highs around 157.40. At the time of writing, GBP/JPY is trading at 157.04, up 0.02% for the day.
GBP/JPY daily chart
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On the daily chart, the GBP/JPY cross currency pair has risen sharply after breaking the strong long-time resistance barrier near the 152.90-153.00 zone, which coincides with the 21-day and the 50-day Simple Moving Average’s (SMA) confluence. The pair embarks above the 157.00 mark for the first time since 2016. Now, the upside seems exhaustive as the formation of a Doji candlestick suggests indecisiveness among traders.
If the price breaks below the intraday’s low, it could fall back to the psychological 156.00 mark.
Furthermore, the overbought Moving Average Convergence and Divergence (MACD) hints at more downside toward the 155.10 horizontal support level. The Relative Strength Index (RSI ) reads above 70, which suggests the stretched buying conditions.
Next, the GBP/JPY bears could approach the 154.00 horizontal support level.
Alternatively, if the price continues to move higher, the bulls would first meet the previous day’s high of 157.41. A daily close above this level would open the gates for the June 2016 high near 160.67.