GBP/JPY Price Analysis: Pound extends rally, likely to test again key level at 138.00

• Pound jumps on Brexit latest developments, add to gains.
• GBP/JPY looks at the 138.00 area that capped the upside earlier in October.

The GBP/JPY pair rose sharply over the last hours extending gains after it was reported that Brexit talks are set to resume aiming for a deal by mid-November. The pound soared across the board, extending the positive momentum.

The daily chart shows GBP/JPY moving with a positive trend in the short-term after finding support on the 20-day moving average that stands today at 136.35.  A daily close below would expose the uptrend line at 135.80; with a break lower negating the bullish bias.

On the upside, the next strong barrier is seen slightly below 138.00, a horizontal resistance and also the 55-day moving average. A close above would suggest more gains ahead targeting the 139.00 area (intermediate resistance at 138.60).

GBP/JPY daily chart