GBP/JPY Price Analysis: Head-and-shoulders chart pattern in the H4 targets a fall towards 161.50
|- GBP/JPY is registering a minimal loss of 0.06% as the Asian session begins.
- A risk-off impulse, alongside Japanese authorities’ verbal intervention in the FX markets, bolstered the yen against most G8 currencies.
- The GBP/JPY 4-hour chart portrayed the formation of a head-and-shoulders pattern which targets a drop to 161.50.
On Thursday, the GBP/JPY extended its losses for the third consecutive trading day, courtesy of a risk-off impulse that kept investors leaning toward less risky assets, turning to the greenback alongside US Treasuries. Meanwhile, US equities finished with losses between 0.66% and 1.71%. At the time of writing, the GBP/JPY is trading at 164.31, below its opening price by 0.08%.
GBP/JPY Price Analysis: Technical outlook
During the week, the GBP/JPY hit a weekly high at around 167.94 before retreating due to some factors. Rumors of Japanese authorities intervening in the Forex Markets caused a Japanese yen repricing across most crosses. Therefore, the GBP/JPY tumbled on sentiment, though it’s testing the September 9 cycle low at 164.30. If the latter gives way, the pair could drop towards a confluence area with the 20, 50, and 100-day EMAs, around 163.00-34.
The GBP/JPY 4-hour chart confirms the bearish bias in the near term. A head-and-shoulders chart pattern emerged, which, measured by the distance of the head-to-the-neckline, would target a drop from current spot prices toward 161.50. therefore, the GBP/JPY first support would be the S1 pivot at 164.01. A breach of the latter will expose the confluence of the S2 daily pivot and the 100-EMA at 163.52, ahead of the confluence of the 200-EMA and the S3 pivot at 162.82, ahead of the161-50 target.
GBP/JPY Key Technical Levels
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