GBPJPY Price Analysis: Testing the neckline of the head-shoulder pattern at 165.00

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  • The pound fails at 167.10 and returns to the 165.00 support zone.
  • Below 165.00 the pair could trigger a “Shoulder-to-Head” pattern with the target of reaching 160.00 or below.

On Thursday, the pound headed south against the yen for the third day in a row, extending its reversal from Monday’s high at 169.05 to test the neckline of a head and shoulders pattern at 165.00.

The yen advanced after the US CPI data.

The slight recovery attempt seen during the Asian and early European sessions did not continue above 167-00, with the pair falling sharply during the early hours of the US session as the Yen spiked after the release of US inflation data.

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The strength of the yen has led the pair to test an important support level at 165.00, where the lows of 14-21 Oct and 3-4 Nov meet the 50-day SMA.

Hourly charts show the pair close to overbought levels, which could favor a consolidation before further moves.

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A confirmation below 165.00 would add to the negative pressure and send the pair to test the 100-Day SMA, now at the 164/05 zone, and the 200-Day SMA, at 162.10 before targeting the October low at 159.80.

On the other hand, the pair should break intraday resistance at 167.50 to relieve negative pressure, and extend towards 6-7 Nov highs at 167.11, clearing the way towards the psychological level of 170.00.

GBP/JPY daily chart

GBPJPY daily chart

Technical levels to watch

GBP/JPY

Overview
last price today 165.88
daily change today -0.42
daily change today -0.25
Daily opening today 166.3
Trends
daily SMA20 168.38
daily SMA50 164.7
daily SMA100 164
daily SMA200 162.02
levels
Previous daily high 168.32
Previous Daily Low 165.97
Previous Weekly High 172.14
Previous Weekly Low 165.09
Previous Monthly High 172.14
Previous Monthly Low 159.73
Daily Fibonacci of 38.2%. 166.87
Daily Fibonacci of 61.8% 167.42
Daily Pivot Point S1 165.4
Daily Pivot Point S2 164.5
Daily Pivot Point S3 163.04
Daily Pivot Point R1 167.76
Daily Pivot Point R2 169.22
Daily Pivot Point R3 170.12

Source: Fx Street

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