The GBP/JPY pair continued its upward trend on Monday, reaching fresh cycle highs around 202.50, the highest level since 2007. Despite some initial selling pressure bringing the pair down to 106.14, buyers stepped in to push it back up to new highs.
The Daily Relative Strength Index (RSI) is at 68, just below the overbought zone, indicating a bullish momentum. However, the rapid move towards overbought conditions suggests a potential correction. The Daily Moving Average Convergence Divergence (MACD) shows increasing green bars, confirming the ongoing bullish trend but nearing a peak.
The GBP/JPY pair remains above the 20-day, 100-day, and 200-day Simple Moving Averages (SMAs), supporting the overall bullish trend. Traders should be prepared for a possible correction as indicators show over-extended movements.
If the pair drops below 202.00 support, it may test levels at 201.00 and 200.20 (20-day SMA) before potentially reaching the psychological level of 200.00. On the other hand, resistance levels are at 203.00 and 203.50 if bullish momentum continues.