GBP/JPY Price Analysis: Bears approach 200-SMA surrounding 163.00
|- GBP/JPY extends the previous day’s pullback from 38.2% Fibonacci retracement.
- 200-SMA, seven-week-old support line restrict short-term downside.
- Bulls have multiple hurdles before challenging the yearly top.
GBP/JPY remains pressured towards the 200-SMA as it extends the previous day’s losses to 163.40 during Wednesday’s Asian session. In doing so, the cross-currency pair justifies the recent pullback from the 38.2% Fibonacci retracement level of the August-September upside.
Given the downbeat MACD and RSI (14), are not oversold, the GBP/JPY prices are likely to stay depressed, which in turn favors the odds of breaking the 200-SMA support near 163.00.
However, the 61.8% Fibonacci retracement level and an upward sloping support line from early August, respectively near 162.45 and 161.75, could challenge the GBP/JPY bears afterward.
Should the cross-currency pair drop below 161.75, the bears can aim for the monthly low surrounding 160.65 before directing the sellers towards the 160.00 psychological magnet.
Alternatively, the 38.2% Fibonacci retracement level near 164.30 appears the immediate hurdle for the GBP/JPY buyers to tackle.
Following that, multiple resistances are there between 166.00 and 168.80 to challenge the bulls, a break of which could quickly refresh the yearly top surrounding the 170.00 level.
Overall, GBP/JPY is likely to witness further downside but the room to the south is limited.
GBP/JPY: Four-hour chart
Trend: Limited downside expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.