GBP/JPY Price Analysis: Plummets below 155.50 after losing more than 2.93% in the day

Weaker than estimated UK economic data and UK’s new budget fueled UK’s recession fears.
A break below the 200-EMA officially shifted the GBP/JPY as bearish biased.

Christian Borjon Valencia FXStreet

GBP/JPY plunged more than 450 pips or 2.93% on Friday, amidst risk-aversion, after PMIs reported by S&P Global showed that the EU and the UK could be headed into a recession. Also, news of a new GBP 161 Billion UK budget to stimulate growth might exert upward pressure on UK Inflation, threatening to deteriorate the already battered economy. At the time of writing, the GBP/JPY is trading at 155.48.

GBP/JPY Price Analysis: Technical outlook

On Friday, the GBP/JPY officially shifted to a bearish bias after tumbling sharply below the 200-day EMA at 160.25, reaching six-month-lows at around 155.33. Due to the size of the collapse, the Relative Strength Index (RSI) accelerated towards oversold conditions, with readings at 25.43, suggesting that the pair might be subject to a mean reversion move.

Nevertheless, if the GBP/JPY drops below the 155.00 figure, a fall towards the March 8 daily low at around 150.97 is on the cards. So the GBP/JPY first support would be the 155.00 figure. Once cleared, the next support would be the January 24 cycle low at 152.90, ahead of the 150.97 mark.

On the other hand, the GBP/JPY's first resistance would be the 156.00 mark. Break above will expose the May 27 daily low-turned-resistance at 157.87, ahead of the 158.00 mark.

GBP/JPY Key Technical Levels

GBP/JPY

Overview
Today last price	155.64
Today Daily Change	-4.71
Today Daily Change %	-2.94
Today daily open	160.35

Trends
Daily SMA20	163.48
Daily SMA50	163.19
Daily SMA100	163.07
Daily SMA200	160.29

Levels
Previous Daily High	164.44
Previous Daily Low	159.12
Previous Weekly High	167.22
Previous Weekly Low	162.75
Previous Monthly High	163.99
Previous Monthly Low	159.45
Daily Fibonacci 38.2%	161.15
Daily Fibonacci 61.8%	162.41
Daily Pivot Point S1	158.16
Daily Pivot Point S2	155.98
Daily Pivot Point S3	152.84
Daily Pivot Point R1	163.48
Daily Pivot Point R2	166.62
Daily Pivot Point R3	168.8

Author

Christian Borjon Valencia

FXStreet

Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD holds steady near 1.1650 ahead of US data

EUR/USD stabilizes near 1.1650 on Friday after facing a rejection once again near seven-week highs. The pair, however, continues to draw support from persistent US Dollar weakness, despite a cautious market mood. Traders now await the US September PCE inflation and UoM Consumer Sentiment data.

GBP/USD clings to gains in 1.3350 region, eyes on US data

GBP/USD sticks to a positive bias near 1.3350 in the second half of the day on Friday. Traders prefer to wait on the sidelines ahead of the key US inflation and sentiment data due later in the day. In the meantime, broad-based US Dollar weakness helps the pair stay afloat.

Gold remains below $4,250 as traders await key US data

Gold gains some positive traction on Friday and trades in the upper half of its weekly range. Dovish Fed expectations continue to undermine the USD and lend support to the commodity. Bulls, however, might opt to wait for the US PCE Price Index before placing aggressive bets.