Detailed FX Market Outlook and Analysis

GBP/JPY Daily Update 23-MAY-2023

GBP/JPY Daily Analysis


In today’s daily update, we delve into the intraday outlook for the GBP/JPY pair. The ongoing rally remains intact, reflecting the continuation of the larger upward trend. The current focus is on achieving the target of the 100% projection level, derived from the range of 149.23 to 172.41, originating from 155.63, with an objective at 178.81. However, it is crucial to monitor the support level at 168.16 closely, as a strong breakthrough would confirm a potential short-term top formation. This reversal would shift the bias towards the downside, initiating a deeper pullback towards the support level at 165.74, and potentially even lower.

Zooming out to the bigger picture, the primary attention remains on the resistance at 172.41, representing the 2022 high. A decisive breakthrough at this level would signify the resumption of the overall upward trend that commenced from the 2020 low at 124.24. The subsequent significant target would be the 161.8% projection level, calculated from the range of 123.95 (2016 low) to 156.89 (2018 high), starting from 124.24, with a projected target at 178.99. However, a firm break of the support level at 165.74 would indicate a rejection near the 172.41 resistance, leading to the extension of the corrective pattern from that point, manifesting as another downward leg.

Considering the potential scenarios, if the GBP/JPY pair continues its upward momentum and manages to surpass the resistance at 172.41, it would signal a further bullish move. In such a case, the next target to watch would be the 178.99 level, which represents the 161.8% projection level as mentioned earlier. Additionally, breaking above this level could open up the possibility of reaching even higher levels in the long term.

On the other hand, if the pair experiences a bearish reversal and breaks below the support level at 165.74, it would indicate a shift in the near-term sentiment. This could lead to a deeper pullback towards the next support level at 163.34, followed by the 160.94 level, which represents the 50% retracement level of the upward move from 124.24 to 172.41.

Traders should closely monitor the key levels mentioned and observe for decisive breakouts or breaches, which would provide further confirmation of the pair’s future direction. Additionally, keeping an eye on any relevant fundamental developments and market sentiment will be important in assessing the overall outlook for the GBP/JPY pair.

GBP/JPY Daily Analysis Summary

In summary, the GBP/JPY pair currently exhibits a bullish bias in the intraday outlook, with the ongoing rally aiming for the 100% projection level. The medium to long-term outlook remains dependent on the outcome of the resistance at 172.41, with a decisive break opening the potential for further upside targets. However, a reversal and break of support levels could lead to a deeper corrective phase. Traders should stay vigilant and adapt their strategies accordingly to navigate the evolving market conditions.

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