GBP/JPY Price Analysis: Drops below the 20-DMA as sellers eye the 100-DMA

GBP/JPY exchanges hands around familiar levels, above 163.00.
From a long-term perspective, the cross is neutrally biased, waiting for a catalyst.
The GBP/JPY hourly chart is neutral-biased but tilted downwards with sellers gathering momentum, as shown by the RSI.

Christian Borjon Valencia FXStreet

The GBP/JPY seesaws during the North American session amidst a dull trading day. Investors are bracing for the release of US inflation data, which would be scrutinized by them, aiming to predict the next move of the FOMC in the September meeting. At the time of writing, the GBP/JPY is trading at 163.15.

The market sentiment is downbeat. US equities are trading with losses, while in the FX space, safe-haven peers begin to recover some ground, except for the US dollar. The GBP/JPY is trading near its opening price, after bouncing from daily lows at 162.62, before hitting the daily high at 163.67. However, risk aversion weighed on the pound, so the cross dived.

GBP/JPY Price Analysis: Technical outlook

From a daily chart perspective, the GBP/JPY is neutral-biased. For the second straight day, buyers’ inability to breach the 20-day EMA at 136.64 increased selling pressure in the cross, with bears piling around the 163.60 area, pushing the exchange rate towards the 163.00 figure.

Hence, the GBP/JPY’s first support would be the August 8 low at 162.56. The break below will expose the August 5 low at 161.11, followed by the August 2 swing low at 159.44. Otherwise, if buyers reclaim the 20-day EMA at 163.64, that would open the door for a test of the 50-day EMA at 164.21.

GBP/JPY Daily chart

In the one-hour scale, the GBP/JPY is neutral biased, trapped within the 161.11-163.84 area. However, the Relative Strength Index (RSI) shows that sellers are gathering momentum, with the RSI at 47.26 and crossing below the 7-RSI SMA, meaning that bears are in control. Therefore, the GBP/JPY first support would be the 100-hour EMA at 162.68. Once cleared, the next support would be the S2 pivot point at 162.43, followed by the S1 daily pivot at 161.85. On the flip side, a break above 163.84 could send the pair towards the August 4 high at 163.97, which, once cleared, could open the door for further gains

GBP/JPY Hourly chart

GBP/JPY Key Technical Levels

GBP/JPY

Overview
Today last price	163.15
Today Daily Change	-0.05
Today Daily Change %	-0.03
Today daily open	163.08

Trends
Daily SMA20	163.68
Daily SMA50	164.27
Daily SMA100	162.98
Daily SMA200	158.52

Levels
Previous Daily High	163.85
Previous Daily Low	162.57
Previous Weekly High	163.99
Previous Weekly Low	159.45
Previous Monthly High	166.34
Previous Monthly Low	160.4
Daily Fibonacci 38.2%	163.36
Daily Fibonacci 61.8%	163.06
Daily Pivot Point S1	162.49
Daily Pivot Point S2	161.89
Daily Pivot Point S3	161.2
Daily Pivot Point R1	163.77
Daily Pivot Point R2	164.45
Daily Pivot Point R3	165.05

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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