GBP/JPY Price Analysis: Refreshes 2-week lows, dives beneath 159.50
- GBP/JPY prolonged its agony and dropped for the third time in the week below 160.00.
- GBP/JPY Price Analysis: Break below 159.50 exacerbated a fall towards 158.90, the week’s low.
The British Pound (GBP) failed to gain ground vs. the Japanese Yen (JPY) on Wednesday after the US Federal Reserve (Fed) hiked rates by 0.25%, a signal perceived by market participants as dovish. A reflection of that is Wall Street’s finishing with solid gains. At the time of writing, the GBP/JPY exchanges hand at 159.39 as the Asian session begins.
GBP/JPY Price Analysis: Technical outlook
Technically speaking, the GBP/JPY remains downward biased, as shown by the daily time frame. During the last six trading days, the GBP/JPY was range-bound within the 159.50-161.70 range, unable to gather direction upwards/downwards until Wednesday’s session, in which the pair clashed with the 20-day Exponential Moving Average (EMA) at 160.12, but retraced and dropped below 160.00.
Momentum indicators like the Relative Strength Index (RSI) turning bearish and the Rate of Chang (RoC) registering that sellers are gathering momentum would pave the way for further downside.
Therefore, the GBP/JPY first support would be the February 1 low of 158.90, after testing a one-month-old downslope resistance trendline, turned support. A breach of the latter and the next demand area would be the top of the previously mentioned trendline at 158.70, followed by the January 19 low at 157.56
On the other hand, the GBP/JPY could resume upwards once bulls reclaim the 20-day EMA at 160.12
GBP/JPY Key Technical Levels
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.
