GBP/JPY Price Analysis: Falls to 4-month lows around 157.40s
|- GBP/JPY drops below a three-month-old upslope trendline, down since last week’s high close of around 3%.
- The RSI at oversold conditions suggests the GBP/JPY could be bottoming, but the RoC suggests that sellers remain in charge.
- GBP/JPY Price Analysis: Break below 157.00 would exacerbate a fall to 154.00.
The GBP/JPY plunged more than 100 pips on Monday, extending its losses to three consecutive days, once price action dived below the 200-day Exponential Moving Average (EMA). Furthermore, the cross of the 20-day EMA beneath the 200-day EMA exacerbated the acceleration of the downtrend, as the GBP/JPY gets poised to fall toward the 155.00 mark. At the time of writing, the GBP/JPY is trading at 157.46, below its opening price by 0.69%.
GBP/JPY Price Analysis: Technical outlook
After clearing a three-month-old upslope support trendline drawn from September lows around 148.60s, the GBP/JPY fall increased its velocity. Last Thursday, the GBP/JPY formed a bearish engulfing candle pattern, followed by a tall red candle that cleared on its way south of the 160.00 figure and the previously mentioned trendline. Oscillators like the Relative Strength Index (RSI) entered oversold conditions, while the Rate of Change (RoC) shows that sellers remain gathering momentum. Therefore, the GBP/JPY might continue to fall further.
Therefore the GBP/JPY first support would be the September 29 daily low of 155.60, followed by the 155.00 mark, ahead of the September 27 swing low of 154.07.
As an alternate scenario, if GBP/JPY buyers reclaim 159.00, that could open the door to 160.00, close of the previously mentioned upslope trendline, which would be resistance, ahead of the 20-day EMA at 161.86.
GBP/JPY Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.