- The British pound is down from weekly highs, 120 pips on risk aversion.
- GBP / JPY Technical Outlook: Still biased to the upside, but GBP bulls need to rally above the 50 hourly SMA.
Thursday, the crossing GBP/JPY it falls for the second day in a row, retreating from weekly highs around 157.70, close to 100 pips on the day. At time of writing, GBP / JPY is trading 156.53, down 0.28%. The market mood is pessimistic, as shown by US stocks falling between 0.55% and 1.36%. In the currency market complex, safe-haven pairs like the JPY and CHF advance, while the US dollar continues to be hit by a sell-off across the board.
GBP / JPY Price Forecast: Technical Outlook
In the overnight session for American session traders, the cross was moderate around the 157.00-40 range. But, as the market sentiment deteriorated, the appetite for safe haven increased, sending GBP / JPY tumbling towards the daily low at 156.31, about 10 pips below the daily pivot S2.
A previous analysis of GBP / JPY noted that “GBP / JPY is biased upward” but also emphasized that “the high reached on January 5 at 157.76, below the high on October 20, 2021, at 158.22, exposed to GBP / JPY to a downward pressure “. . “
That said, GBP / JPY fell 120 pips from the weekly high at 157.72, attributed to market risk aversion.
On the downside, the next GBP / JPY demand zone would be the psychological level of 156.00. A break below that level would expose the January 4 daily low at 155.34. and then the daily low on January 3 at 154.90.
On the upside, the first resistance level would be the 200 hourly SMA at 156.81. A decisive break above that level would expose the 100 hourly SMA at 157.00, followed by the 50 hourly SMA at 157.14.