GBP/JPY technical analysis: key MA hurdle at 138 could come into play

• GBP/JPY eyes stronger oversold bounce to 138.
• The 4-hour chart is flashing bullish divergence of the RSI.
• The 14-day RSI is reporting oversold conditions.

GBP/JPY is currently trading largely unchanged on the day around 137.35 and could rise to the 4-hour chart 50-candle moving average (MA) at 138 during the day ahead, as technical indicators are pointing to seller exhaustion.

For instance, the 4-hour chart relative strength index (RSI) is flashing a channel breakout, having created a bullish divergence on Tuesday.

Further, the 14-day RSI is also reporting oversold conditions with a below-30 print for 22nd consecutive day.

The case for a rise to 138.00 would weaken if the pair finds acceptance below 137.00, although that looks unlikely.

4-hour chart

Trend: Oversold bounce likely

Technical Levels