GBP/JPY Price Analysis: Dropped to 4-month lows but remains above 160.00

GBP/JPY nosedived to fresh 4-month lows below 160.00, though buyers reclaimed the 160.00 figure.
A decisive break below 160.00 could pave the way towards 158.00; otherwise, a re-test of 161.00 is on the cards.

Christian Borjon Valencia FXStreet

The GBP/JPY slightly advanced, following Thursday’s volatile session, after the Bank of Japan (BoJ) decided to hold rates unchanged but intervene in the FX market, sending the USD/JPY tumbling from around 145.90 to 140.34 after emphasizing that the Japanese yen weakness, was not aligned with fundamentals. Consequently, the GBP/JPY dropped 1.34% on Thursday, but at the time of writing is trading at 160.25, up 0.05%.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY price action illustrates the pair tumbling below the 200-day EMA, hitting a fresh four-month-low at around 159.12; buyers stepped in and reclaimed the previously-mentioned 200-day EMA at 160.27. Traders should note that the Relative Strength Index (RSI) fell below the midline, extending its fall towards the 36.46 reading, suggesting that sellers are in charge. Therefore, the GBP/JPY is downward biased. Once it clears the 200-day EMA, a re-test of the 159.00 area is on the cards.

In the short term, the 4-hour chart illustrates that the GBP/JPY reached the head-and-shoulders chart pattern target at around 161.50; the downtrend extended towards the four-month low before recovering to 160.00. Nevertheless, the GBP/JPY bias shifted downwards, further cemented by the cross of the 20-EMA below the 200 one.

Therefore, the GBP/JPY’s first support would be the 160.00 psychological price level. The break below will expose the four-month low at 159.12, followed by 159.00, ahead of the S1 daily pivot at 158.07.

GBP/JPY Key Technical Levels

GBP/JPY

Overview
Today last price	160.26
Today Daily Change	-2.08
Today Daily Change %	-1.28
Today daily open	162.34

Trends
Daily SMA20	163.54
Daily SMA50	163.27
Daily SMA100	163.07
Daily SMA200	160.24

Levels
Previous Daily High	163.95
Previous Daily Low	162.24
Previous Weekly High	167.22
Previous Weekly Low	162.75
Previous Monthly High	163.99
Previous Monthly Low	159.45
Daily Fibonacci 38.2%	162.89
Daily Fibonacci 61.8%	163.3
Daily Pivot Point S1	161.73
Daily Pivot Point S2	161.13
Daily Pivot Point S3	160.02
Daily Pivot Point R1	163.44
Daily Pivot Point R2	164.55
Daily Pivot Point R3	165.16

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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