GBP/JPY Price Analysis: Further downside below 163.00 appears more likely
- GBP/JPY takes offers to extend pullback from one-week-old horizontal resistance.
- Looming bear cross on MACD, RSI retreat add strength to downside bias.
- 50-SMA restricts immediate downside, bulls need validation from monthly high.
GBP/JPY prints mild losses around 162.75-80 as it pares the previous day’s gains around the intraday low heading into Monday’s London open.
In doing so, the cross-currency pair justifies the early-day Doji candlestick formation, as well as the U-turn from a one-week-old horizontal resistance line.
Adding strength to the downside bias is the RSI (14) retreat from the +50.0 area, often considered an overbought zone, as well as the looming bear cross on the MACD.
That said, the GBP/JPY bears are well-set to visit the 50-SMA support near 162.00.
Following that, a two-week-old ascending support line precedes an upward-sloping trend line from February 03 to challenge the GBP/JPY bears around 161.45 and 161.20 in that order.
It should be noted that the pair’s weakness past 161.20 will have the 161.00 round figure as the last defense, a break of which could make it vulnerable to challenge the mid-month swing low surrounding 160.00.
On the contrary, recovery moves remain elusive below the immediate resistance line, around 163.25 by the press time. Following that, the monthly high of 163.76 may act as an extra filter towards the north.
If the GBP/JPY bulls keep the reins past 163.76, the early December 2022 low near 164.00 will be in the spotlight ahead of directing the quote towards the last September’s peak of 167.22.
GBP/JPY: Four-hour chart
Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
