- GBP/JPY is trading around known levels, above 163.00.
- From a long-term perspective, the cross has a neutral bias, awaiting a catalyst.
- The GBP/JPY hourly chart has a neutral bias, but is leaning lower as sellers gain momentum, as shown by the RSI.
The GBP/JPY falters during the North American session in the middle of a boring day. Investors are preparing for the publication of data on inflation in the US, which will be analyzed by them, with the aim of predicting the next move of the FOMC at the September meeting. At the time of writing, the GBP/JPY pair is trading at 163.15.
Market sentiment is bearish. US stocks are trading at a loss, while in the currency space, haven pairs are starting to make up some ground, except for the US dollar. GBP/JPY is trading close to its opening price, after bouncing from daily lows at 162.62, before hitting daily highs at 163.67. However, risk aversion weighed on the pound, causing the cross to fall.
GBP/JPY Price Analysis: Technical Outlook
From a daily chart perspective, the GBP/JPY pair has a neutral bias. For the second day in a row, the inability of buyers to break above the 20-day EMA at 136.64 added to the selling pressure on the cross, with bears huddled around the 163.60 area, pushing the exchange rate towards the figure. of 163.00.
Therefore, the first GBP/JPY support would be the August 8 low at 162.56. If it breaks below, the 5th Aug low at 161.11 will be exposed, followed by the 2nd Aug low at 159.44. Otherwise, if the buyers retake the 20-day EMA at 163.64, that would open the door for a test of the 50-day EMA at 164.21.
GBP/JPY daily chart
On the one hour time frame, GBP/JPY has a neutral bias, trapped in the 161.11-163.84 zone. However, the Relative Strength Index (RSI) shows that the sellers are gaining momentum, with the RSI at 47.26 and crossing below the 7 RSI SMA, which means that the bears are in control. Therefore, the first support for the GBP/JPY would be the 100 hourly EMA at 162.68. Once broken, the next support would be the S2 pivot point at 162.43, followed by the S1 daily pivot at 161.85. On the other hand, a break above 163.84 could send the pair towards the 4th Aug high of 163.97, which, once broken, could open the door for further gains.
GBP/JPY Hourly Chart
Source: Fx Street
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