GBP/JPY Price Analysis: Dives to near two-week lows, around mid-154.00s

GBP/JPY came under some heavy selling pressure in reaction to the incoming Brexit headlines.
The formation of a bullish flag pattern supports prospects for the emergence of some dip-buying.
A convincing break below mid-154.00s is needed to negate the constructive set-up.

Haresh Menghani FXStreet

The GBP/JPY cross witnessed a dramatic turnaround on Wednesday and tumbled nearly 85 pips from the intraday swing highs, around the 155.30 region. The downward momentum dragged the cross to two-week lows, around mid-154.00s in the last hour.

The sharp intraday fall was sponsored by some heavy selling around the British pound in reaction to the latest Brexit headlines. The European Commission Vice President of Interinstitutional Relations and Foresight, Maroš Šefčovič reiterated that the EU will react swiftly if the UK takes any unilateral action on border controls.

Apart from this, speculations that the UK may delay plans to end restrictions fully on June 21 – amid the spread of the so-called Delta variant – further acted as a headwind for the sterling. This, along with a strong pickup in demand for the safe-haven Japanese yen, exerted some additional downward pressure on the GBP/JPY cross.

From a technical perspective, the GBP/JPY cross was last seen hovering near support marked by the lower boundary of a short-term descending channel. Given the recent strong positive move, the mentioned trend-channel seemed to constitute the formation of a bullish continuation pattern on short-term charts.

The constructive set-up is reinforced by the fact that technical indicators on the daily chart – though have been losing positive traction – are still holding in the bullish territory. That said, a convincing break below the trend channel will negate the positive outlook and prompt some aggressive technical selling.

The GBP/JPY cross might then extend its corrective pullback from multi-year tops and accelerate the slide to test the 154.00 round figure. Some follow-through selling has the potential to drag the cross further towards the next relevant support near the 153.25-20 horizontal zone en-route the 153.00 mark.

On the flip side, the key 155.00 psychological mark now seems to act as an immediate hurdle. A sustained move beyond will reaffirm the bullish flag pattern and push the GBP/JPY cross towards the trend-channel resistance, currently around mid-155.00s.

GBP/JPY 4-hour chart

Technical levels to watch

GBP/JPY

Overview
Today last price	154.56
Today Daily Change	-0.44
Today Daily Change %	-0.28
Today daily open	155

Trends
Daily SMA20	154.7
Daily SMA50	152.68
Daily SMA100	150.09
Daily SMA200	144.11

Levels
Previous Daily High	155.09
Previous Daily Low	154.56
Previous Weekly High	155.94
Previous Weekly Low	154.82
Previous Monthly High	156.08
Previous Monthly Low	150.93
Daily Fibonacci 38.2%	154.89
Daily Fibonacci 61.8%	154.76
Daily Pivot Point S1	154.67
Daily Pivot Point S2	154.35
Daily Pivot Point S3	154.14
Daily Pivot Point R1	155.21
Daily Pivot Point R2	155.42
Daily Pivot Point R3	155.74

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold approaches $4,000 following US inflation data

Gold surrenders a big chunk of Monday’s advance and approaches the key $4,000 mark per troy ounce on Tuesday. The precious metal’s decline follows the solid performance of the US Dollar and rising US Treasury yields after US inflation figures.

Pi Network rebounds from record lows, exits oversold territory as momentum improves

Pi Network (PI) shows a strong recovery on Tuesday, up over 7% after recording its all-time low of $0.0624 the previous day. PI token’s appeal in the derivatives market shows minor improvement, with Open Interest rising to $6.21 million.

Five risks for the global economy in 2027

From AI bubbles to geopolitical breakthroughs, these are some of the five ways why this outlook could go wrong – or right: A severe correction in US stocks triggered by an AI meltdown, second-round inflation effects emerge at scale or geopolitical de-escalation delivers an energy peace dividend.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.