GBP/JPY is still on a steady uptrend on its longer-term time frame, despite the selloff seen in the past few weeks. 

The pair has just bounced off the rising trend line on the daily time frame after finding support at the 38.2% Fibonacci retracement level. 

A continued rally might be in the cards, as a bullish divergence can be seen when price made higher lows while stochastic made lower lows. In addition, the oscillator is starting to move out of the oversold zone, which means that there’s upward momentum already.

The pair could retest its recent highs around the 160.00 handle so a long trade at market with a stop below the trend line would still yield a good return on risk. 

By Kate Curtis from Trader’s Way