GBP/JPY Price Analysis: Double-bottom in the H1, propels the pair above 164.70s

• GBP/JPY rallied 200 pips and hit a daily high at 165.08.
• The British pound got bolstered by an upbeat market mood, despite soft US data reigniting recession fears.
• GBP/JPY Price Analysis: To remain range-bound after fulfilling a double-bottom price target at 164.50.

The GBP/JPY erases last Friday’s losses and is gaining close to 1% on Monday, amidst an improved market mood with US equities rising, ahead of US mega-tech companies reporting earnings after US data further reinforces a recessionary scenario. At the time of writing, the GBP/JPY is trading at 164.70.

GBP/JPY Price Analysis: Technical outlook

From a daily chart perspective, the GBP/JPY is still upward biased due to sellers being unable to keep prices below the 50-day EMA at 163.62. it is also worth noting that the Relative Strength Index (RSI) spiked from negative territory, and it’s about to break above the RSI’s 7-day SMA, around 52.41, which would exacerbate and open a move towards the July 21 high at 165.98. However, the GBP/JPY would be vulnerable to selling pressure unless the latter is achieved.

GBP/JPY 1-hour chart

The GBP/JPY 1-hour chart depicts the pair formed a double-bottom around the 163.00 area, bolstering the cross, which rallied close to 200-pips. On its way north, the GBP/JPY pierced the 100-hour EMA at 164.90 before retreating above the 200-hour EMA at 164.68. However, due to RSI about to enter overbought conditions and price action lacking the strength to pierce the 165.00 late in the New York session, it would keep the pair range bound.

The GBP/JPY’s first resistance would be the July 25 high at 165.08. Break above will expose the confluence of the July 21 high and the R2 pivot around 166.00. On the flip side, the GBP/JPY first support would be the R1 daily pivot point at 164.58. Once cleared, the next support would be the 163.97-164.12 area, followed by the daily pivot point at 163.79.

GBP/JPY Key Technical Levels