GBP/JPY Price Analysis: Steady above 163.00 amidst a positive sentiment, a bearish flag looms
|- The GBP/JPY trims weekly losses though prevails down, losing 1.34%.
- The cross-currency is trading near the top of a bearish flag.
- GBP/JPY upward break above the bearish flag might send the cross towards 164.00.
The GBP/JPY is recovering some ground, following a 700 pip drop from YTD highs around 168.70s towards 161.30s, courtesy of constant verbal intervention by Japanese authorities, expressing that fundamentals need to reflect the yen value. At 163.19, the GBP/JPY jumped from weekly lows, gaining 0.20% as the Asian session kicked in.
Asian equity futures rise, depicting an upbeat market mood. Investors appear calmed that the US Fed raised rates 75 bps, though the US central bank put a lid on the size of subsequent movements to the Federal funds rate (FFR), easing tensions of aggressive increases.
GBP/JPY Price Forecast: Technical outlook
1-hour chart
Elsewhere, the GBP/JPY marches firmly within the boundaries of a bearish flag, as illustrated in the 1-hour chart. The cross-currency reclaimed the 50-simple moving average (SMA) at 162.63 and accelerates to the top of the bearish flag.
If the GBP/JPY breaks upwards, that would invalidate the bearish flag and open the door for further gains. The cross-currency first resistance would be the R1 daily pivot at 163.44. Once cleared, it would pave the way to the confluence of the 100-SMA and the R2 daily pivot at 164.01-05, followed by June’s 13 high at 164.32.
On the flip side, the GBP/JPY first support would be the confluence of the 50-SMA and the central pivot point at around 162.58-62. A breach of the latter would send the pair towards the bottom of the bearish flag around 162.20. Once broken, the following demand zone would be the S1 daily pivot at 162.00
Key Technical Levels
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