FxWirePro: “Dragonfly Doji” poses little cause of concern for GBP/JPY bears but no harms for intraday bull swings extension upto 139.155

Dragonfly Doji is formed at 135.840 levels on monthly charts to form a bottom.

Hammer pattern is formed at 130.840 levels on daily charts to form the bottom.

Consequently, from the last couple of days, the pair has been bouncing anywhere beyond  134.656 northwards ever since the hammer pattern on daily and dragonfly doji pattern on monthly charts are formed.

We are not isolating these bullish signals, both leading and lagging oscillators daily charts indicate buying interests.

Bullish momentum is intensified as we can make out from the leading oscillators positively converging rallies along with the price rise.

While RSI (14) trending above 62 level that signals the strength in buying interests.

Stochastic oscillators have reached overbought territory but no convincing %d crossover is seen.

The current prices have spiked above both DMAs, in addition, 7DMA has just crossed over 21DMA, while MACD has shown bullish crossover which would mean that the uptrend would likely continue in short run atleast.

Trade tips:

Well, since implied volatility is on the higher side in GBP crosses, on an intraday speculative basis, it is good to buy one touch digital vega calls favoring above bearish technical indication for targets up to 135.155 levels.

Alternatively, medium term bears can maintain shorts in mid-month futures for hedging but no new fresh short build ups are advisable.