GBPJPY – extended bullish acceleration faced strong headwinds at daily cloud top
The pair extends strong rally into second straight day, as fading concerns over North Korea / Hurricane Irma’s impact drastically reduced safe-haven demand and pound got additionally inflated by upbeat UK inflation numbers.
The cross dented target at 145.70 (daily cloud top) on today’s strong acceleration higher and may extend recovery rally on sustained break above the cloud.
The price is currently riding on the wave C (from 141.18 trough) of five-wave cycle from 139.30 (24 Aug low) which could extend towards its Fibo138.2% Expansion at 146.18 and 146.80 (03 Aug lower top) in extension.
Daily studies turned into full bullish setup and are supportive for further advance.
However, overbought conditions suggest corrective action in the near term (no signal yet), as daily cloud is narrowing and will twist next week that may also attract for stronger pullback.
Initial support lies at 114.79 (broken FE 100.0%), followed by session low /55SMA at 143.90 and rising daily Tenkan-sen at 143.45.
Key near-term support lies at 143.25 (daily cloud base / Fibo 38.2% of 139.30/145.71 ascend).
Res: 145.70; 146.18; 146.80; 147.05
Sup: 144.79; 144.19; 143.90; 143.45