GBP/JPY Price Analysis: Surges above the 183.90 area following UK GDP data

• GBP/JPY edges higher to 183.90 following the UK GDP data.
• The cross trades within an ascending trend-channel since August 4.
• GBP/JPY’s key resistance emerges at 184.00; the initial contention level to watch is at 183.20.

The GBP/JPY cross gains ground in positive territory for the fifth consecutive day, heading into the early European session on Friday. The cross currently trades near 183.90, up 0.24% for the day.

The latest data released by the UK’s Office of National Statistics (ONS) showed that the quarterly Gross Domestic Product (GDP) for the United Kingdom came in at 0.2% in Q2, against the market expectation of 0%. Meanwhile, the GDP MoM for June arrived at 0.5% vs. 0.2% prior.

According to the one-hour chart, the GBP/JPY trades within an ascending trend-channel since August 4. The cross stands above the 50- and 100-hour Exponential Moving Averages (EMAs) with an upward slope, which means the further upside looks favourable for the cross.

That said, GBP/JPY’s key resistance emerges at 184.00, highlighting a confluence of a psychological round mark and a high of July 6. A decisive break above the latter could pave the way to the YTD high at 184.25. Any meaningful follow-through buying will see the next stop at 184.55 (the upper boundary of an ascending trend-channel) en route to 185.00 (a round figure).

On the downside, the initial contention level to watch is at 183.20 (50-hour EMA). The critical support level is located at 182.80, a convergence of the lower limit of the ascending trend-channel and the 100-hour EMA. Further south, the cross will see a drop to 182.00 (a psychological round figure) and 181.40 (the low of August 8).

The Relative Strength Index (RSI) is located in bullish territory above 50, highlighting that further upside cannot be ruled out. 

GBP/JPY one-hour chart