GBP/JPY Price Analysis: Sellers need validation from 162.70
- GBP/JPY struggles for clear directions, grinds near intraday high of late.
- Multiple pullbacks from the key SMAs, impending bear cross on the MACD tease sellers.
- Bulls should remain cautious below descending trend line from late June.
GBP/JPY steadies near 163.20, after rising for the last three days, during the initial Tokyo session on Wednesday.
The cross-currency pair, however, remains on the bear’s radar as it has repeatedly failed to cross the 100-SMA in the last few days. Also keeping sellers hopeful is the looming bear cross on the MACD.
However, a clear downside break of the weekly support line near 162.70 becomes necessary for the GBP/JPY sellers to retake control.
Following that, a downward trajectory towards 161.00 and the 160.00 psychological magnet can’t be ruled out. Though, the monthly low near 159.45 might challenge the bears afterward.
On the contrary, a convergence of the 100-SMA and the 50% Fibonacci retracement of the June-August downside, near 163.60 restricts the immediate upside of the GBP/JPY pair.
Also acting as an upside filter is the 200-SMA and 61.8% Fibonacci retracement level, respectively around 163.90 and 164.70.
It should be noted that the GBP/JPY bulls remain skeptical until the quote stays below the downward sloping resistance line from late June, around 165.75 by the press time.
GBP/JPY: Four-hour chart
Trend: Further weakness 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.
