GBP/JPY: Double Bottom Triggered
GBP/JPY has triggered the double bottom formation that we noted yesterday. Although short-term overbought conditions are in place, we anticipate a higher low versus 148.26, for a fresh swing higher back towards the 152.00 region.
Failure to hold above the 148.30 zone will warn of a return to the 200 day moving average, currently at 144.31.
In the longer-term, we favour a further rise towards the strong resistance at 163.09 (07/08/2009) as long as the key support area between 146.46 (16/04/2013 low) and 145.88 (15/03/2013 high) holds. We do not expect a break of this resistance in the coming months though.