GBP/JPY Price Analysis: A break of a bullish flag exposes a move towards 156.00

• The British pound advances as the Asian session begins, up 0.09%.
• The GBP/JPY benefits from a stronger US dollar; as the Japanese yen weakened, the GBP/JPY pair rallied.
• GBP/JPY: The break of the bullish flag could propel the pair towards 156.00.

The British pound advances as the Asian Pacific session takes over the American session, up some 0.09%, trading at 153.94 at the time of writing. On Tuesday, the market sentiment was downbeat through the majority of the session. However, it recovered as the New York session wind down, with the S&P 500 and the Dow Jones Industrial rising, while the tech-heavy Nasdaq Composite fell.

During the day, earlier in the Tuesday Asian session, the British pound fell to 153.20, following the GBP/USD footsteps. However, as European traders got to their desks, downward pressure on safe-haven currencies weakened except for the US dollar. That said, the sterling jumped at the daily lows, pushing the GBP/JPY pair towards the 154.00 figure.

GBP/JPY Price Forecast: Technical outlook

The price action of the GBP/JPY on Monday depicted a bullish-piercing pattern that needs confirmation. At press time, Tuesday’s candlestick needs to close above 154.44, to cement the upward bias; otherwise, the GBP/JPY would keep trading sideways though within a narrower range than the 152.40-154.30 range, as the top-trendline of a bullish flag lies close to the 154.00 figure.

If the GBP/JPY breaks above the bullish flag, the pair’s next target would be the November 4 swing high at 156.25.

On the flip side, failure of an upside break of the bullish flag would open the door for further downside. The first support would be the 50-DMA at 154.30. A breach of the latter would expose the confluence of the 100 and the 200-DMA around the 152.40-70 region.