GBP/JPY Price Analysis: Bearish After Breaking Below the 200 EMA

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  • In the overnight session, GBP/JPY fell around 4.50% on concerns about the UK budget.
  • GBP/JPY broke through the 20 and 50-week EMAs, hovering around the 100-week EMA.
  • GBP/JPY Price Analysis: Bearish trend change as it broke below the 200 EMA, with a view to retesting the lows around 148.00.

GBP/JPY falls as the New York session nears completion, but recovers after hitting a fresh one-year low around 148.63, on rising concerns that the UK’s new budget will likely adds to the country’s inflationary pressures amid the Bank of England’s tightening cycle to quell double-digit inflation. At the time of this writing, the GBP/JPY pair is trading at 154.56, still below its opening price.

GBP/JPY Price Analysis: Technical Outlook

The weekly chart of GBP/JPY shows that the cross fell below the 20, 50 and 100-week EMAs, although the pair trimmed some of its losses and climbed back above the 154.80 mark. Oscillators, mainly the Relative Strength Index (RSI), turned negative, showing the impact of Japanese currency intervention coupled with the slowdown in the UK economic outlook. If GBP/JPY records a decisive break below the 100-WEMA at 153.52, it could pave the way for further losses. Otherwise, the currency cross is expected to remain within the range of 153.50-158.56.

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From a daily chart point of view, the GBP/JPY changed its bearish bias once the sellers broke above the 200 day EMA, which at the time of writing is at 160.27, which opens the door for new losses. GBP/JPY traders should note that the Relative Strength Index (RSI) fell to oversold levels at 24, which could impede action by sellers. In fact, once the RSI breaks out of those levels, traders should expect a resumption of the downtrend, aiming to hit the new year low at 148.53, which could extend into the September cycle high. 2020 at 142.70.

GBP/JPY key technical levels

GBP/JPY

Overview
last price today 154.55
Today I change daily -1.09
Today Daily variation in % -0.70
Daily opening today 155.64
Trends
daily SMA20 163.18
daily SMA50 163.02
daily SMA100 163.01
daily SMA200 160.31
levels
Previous daily high 160.47
Previous Daily Low 155.45
Previous Weekly High 164.45
Previous Weekly Low 155.45
Previous Monthly High 163.99
Previous Monthly Low 159.45
Daily Fibonacci of 38.2%. 157.37
Daily Fibonacci of 61.8% 158.55
Daily Pivot Point S1 153.9
Daily Pivot Point S2 152.17
Daily Pivot Point S3 148.89
Daily Pivot Point R1 158.92
Daily Pivot Point R2 162.2
Daily Pivot Point R3 163.93

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Source: Fx Street

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