GBP/JPY Price Analysis: Dip buyers emerge at the 20-hour EMA as traders eye 166.00

The GBP/JPY registers minimal losses as the Asian Pacific session begins. On Tuesday, the GBP/JPY opened below the 164.00 figure and rose towards the daily high at 165.54 before retracing some of its gains, finishing Tuesday’s trading session positive by 1%. At the time of writing, the GBP/JPY is trading at 165.24.

GBP/JPY Price Analysis: Technical outlook

Even though the cross-currency pair printed six days of gains, the GBP/JPY needs to clear September’s high at 167.94 to cement its upward bias. GBP/JPY traders should be aware that the Relative Strength Index (RSI) shifted from aiming upwards to flat, suggesting buyers’ exhaustion. Therefore, as buyers get a respite, the GBP/JPY might correct lower to challenge the YTD high at 168.73.

Short term, the GBP/JPY one-hour chart delineates prices advancing steadily, with the 20-hour EMA, as dynamic support, previously tested four times. Still, the GBP/JPY managed to stay on the bullish side of the moving average (MA), used for dip buyers to re-enter longs.

If the GBP/JPY is going to extend its gains, the first resistance would be 166.00. Once cleared, the next resistance would be the R1 daily pivot at 166.14, followed by the R2 pivot point at 167.00.

GBP/JPY’s failure to decisively break 166.00 and deterioration in sentiment could pave the way for further losses. Therefore, the first support would be the confluence of the daily pivot point and the 20-hour EMA at 165.26. Break below will expose the S1 pivot at 164.02, followed by the 50-hour EMA at 163.47 and the 163.00 mark.

GBP/JPY Key Technical Levels