GBP/JPY Price Analysis: Rejected around 161.00, nosedives towards 158.00
|- GBP/JPY collapsed at the confluence of two resistance levels, around 161.00.
- GBP/JPY Price Analysis Remains downward biased, and it could test 155.00 once it reclaims the YTD low of 155.35.
The GBP/JPY dropped to fresh weekly lows of 157.72 after a cooler-than-expected US inflation report, which spurred safe-haven flows in the FX space amidst an upbeat market sentiment. From a technical perspective, the GBP/JPY stalled around the 20-day Exponential Moving Average (EMA) at 160.75 and dropped some 300 pips. The GBP/JPY is trading at around 158.00
GBP/JPY Price Analysis: Technical outlook
From a daily chart perspective, the GBP/JPY remains downward biased. After registering four days of successive days trading with gains, a fundamental news catalyst and solid resistance at the 20-day EMA around 160.75 triggered a fall. Oscillators like the Relative Strength Index (RSI) at bearish territory and continuing to aim lower support a possible test of YTD lows of 155.36. Also, the Rate of Change (RoC) shows that volatility has not picked up yet, which could refrain traders from opening new shorts positions in the GBP/JPY pair.
However, if the GBP/JPY continued to fall, its next support would be 157.00. A breach of the latter will expose the January 4 daily low of 156.49, followed by the YTD low of 155.35, and then the September 22 low of 152.54.
On the flip side, the GBP/JPY first resistance would be the January 4 daily high of 160.16, followed by the 20-day EMA at 160.76, and then the current week’s high of 161.21.
GBP/JPY Key Technical Levels
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