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GBP/JPY technical analysis: Under pressure, but risks skewed to the upside

  • GBP/JPY is looking north with the weekly chart reporting a bullish reversal pattern. 
  • The pair could soon rise above the immediate resistance at 135.67.

GBP/JPY is currently trading around 134.45, representing 0.45% loses on the day. The losses, however, could be short-lived, as technical charts are reporting bullish conditions. 

For instance, the weekly chart shows a bullish candlestick reversal pattern – the pair ended last week with 2.82% gains, validating or confirming the bearish-to-bullish trend change signaled by the preceding week's big bullish engulfing candle. 

The doors, therefore, look open for a sustained break above the immediate resistance of July 25's high of 135.67. 

The breakout, however, may be preceded by a minor pullback to 134.00 if the equity markets trade in the red in Europe due to fears of the European Union (EU)-US trade tensions and concerns of a deeper economic slowdown in China. 

Weekly chart

Trend: Bullish

Technical levels

 

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