GBP/JPY price: Major resistance level reached

• GBP/JPY rose to a key resistance level – the September 2 high.
• It could face increased resistance and should break decisively to extend the trend.

GBP/JPY rose for a seventh consecutive day on Tuesday. It is now close to the key September 2 high at 193.49. This is also close to the 50% Fibonacci retracement level of the July decline at 194.03. These levels are likely to present significant resistance to the pair, which may pull back as a result.

GBP/JPY Daily Chart

That being said, GBP/JPY is in a near-term uptrend as it pivoted to the 9/11 low. Since it is a principle of technical analysis that “the trend is your friend”, this uptrend is more likely to extend.

Therefore, there is a chance that the pair can simply continue higher. If it can break decisively above the resistance line at 193.49, it will confirm an extension of the short-term uptrend.

A decisive break would be one accompanied by a longer-than-average green candle that closed close to the high, or three green candles in a row that broke above the level.

The medium-term trend is sideways, meaning there is no bias in either direction. The long-term trend is up.