GBP/JPY bulls take a breather at crucial resistance

On the busy day of the central banks' meetings, the pound strengthened against most major currencies on the back of the BoE surprising rate hike.

In light of yesterday's CPI data indicating a dramatic acceleration in price growth in November, the Bank of England surprised markets by increasing interest rates by 0.25 percent. This is while it kept the QE plan unchanged at its meeting on Thursday.

Guppy boosts upside momentum

After being trapped in a range for almost two weeks, Guppy bounced off the crucial support zone of 149 mark, held for nine months.

It can be seen on the four-hour chart that GBP/JPY has broken out above its triangle pattern.

After a jump out of the range, the bulls are now struggling to overcome the 152.342 barriers in the vicinity of the 200 EMA.

If buyers maintain their position above this key level of interest, then the upside trend may continue. Consequently, the pair may run up to the 152.900 barriers. When the price is able to sustain a break above this barrier, the price is likely to accelerate upwards toward the next hurdles at 153.98.

The oscillators show that the rally could pause in the short term, as the RSI is trending sharply upwards underneath the overbought territory, and the momentum is also picking up above its 100-baseline. Currently, the MACD histogram is rising in the positive zone above its signal line.

Alternatively, if sellers get back to their seats, immediate support would be found at 151.100. further decline may result in a retest of the 50-EMA, the previous area of interest.