GBP/JPY Price Analysis: Struggles at 169.00 and sinks below 168.00

• The inverted head and shoulders chart pattern on the GBP/JPY daily chart remains intact.
• From a daily chart perspective, GBP/JPY has a bullish bias.
• GBP/JPY Price Analysis: After breaking below 168.00, a fall towards 167.00 and beyond was exacerbated.

The British pound (GBP) is losing ground against the Japanese yen (JPY) on Thursday, despite improved sentiment after the US Federal Reserve (Fed) agreed to slow the pace of rate hikes. For this reason, Asian and European values ​​recovered, but the yen prevailed in the foreign exchange market. At the time of writing this report, the pair GBP/JPY It is trading at 167.71 after hitting a daily high of 168.29.

GBP/JPY Price Analysis: Technical Perspective

The GBP/JPY daily chart illustrates the pair with a bullish bias, even though a head and shoulders chart pattern emerged that remains intact. On Wednesday, the cross rallied near the right shoulder of the pattern, but sellers dipping below 169.00 sent GBP/JPY falling towards 168.00 and beyond. Of note, the Relative Strength Index (RSI) remains above the mid-50 line, but buyers are losing momentum as the slope turns downward.

In the short term, the 4-hour chart of the GBP/JPY shows that the cross has broken below the lower trend line of a rising wedge, indicating that sellers are entering. However, unless GBP/JPY breaks below the 200 EMA at 167.18 and the S1 daily pivot at 167.00, risks remain to the upside. On the other hand, if GBP/JPY recovers to 168.00, the inverted head and shoulders chart pattern could be invalidated if the cross breaks through 169.00.

GBP/JPY Key Technical Levels