GBP/JPY Price Analysis: Approaches to the double-bottom target at 162.00
- On Thursday, the GBPY/JPY snapped two days of losses, though faltered to crack the 20-day EMA.
- GBP/JPY: Break above 162.00 could pave the way toward the YTD high at 168.73; otherwise, a fall towards 161.00 is on the cards.
The GBP/JPY pares some of its Wednesday’s losses on Thursday, edged higher by 0.23%, despite a dismal market sentiment hitting the financial markets. Expectations of further Fed aggression, alongside China’s weaker than expected factory activity, was no excuse for GBP bulls to cap their weekly losses, reclaiming the 161.00 mark. At the time of writing, the GBP/JPY is trading at 161.79, slightly below its opening price, as the Asian session begins.
GBP/JPY Price Analysis: Technical outlook
From a technical perspective, the GBP/JPY remains sideways. The cross-currency remains in the 159.44-162.84 range, unable to crack above/below it due to fundamental reasons linked to both currencies. The Relative Strength Index (RSI) paints a dull picture, trapped in the 38-49 reading, in bearish territory, directionless. Therefore, GBP/JPY intraday price action could be more entertaining.
Short term, the GBP/JPY one-hour chart illustrates the formation of a double-bottom on Wednesday, which targets the 162.00 mark. Nevertheless, buyers’ failure to reach the target spurred a pullback towards the 161.70s area.
Therefore, the GBP/JPY’s first resistance would be the September 1 daily high at 161.87. The break above will expose the double bottom’s 162.00 targets. On the flip side, the GBP/JPY first support would be the 100-EMA at 161.74. A breach of the latter would pave the way towards the bottom of the range, but firstly, sellers need to reclaim the 200-EMA at 161.66, followed by the confluence of the 20 and 50-EMAs around 161.49-53.
GBP/JPY Key Technical Levels
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
