- GBP/JPY stays pressured after reversing from three-week-old ascending resistance line.
- Downbeat oscillators, fears of BoE’s dovish hike direct sellers toward previous resistance line.
- Buyers need validation from BoE Governor Andrew Bailey and yearly high marked in July to retake control.
GBP/JPY holds lower grounds near 182.00 after snapping a three-day uptrend the previous day. In doing so, the cross-currency pair keeps Wednesday’s U-turn from a three-week-old rising trend line as market players await the Bank of England (BoE) Interest Rate Decision on Thursday.
Also read: Bank of England Preview: Sell Sterling? Why Bailey may break the Pound, even with a bigger hike
Not only the quote’s pullback from the key resistance line stretched from July 11 but bearish MACD signals and downward-sloping RSI (14), not oversold, also weigh on the GBP/JPY price on a crucial day.
With this, the pair sellers appear well set to test the previous resistance line from July 06, close to 181.30 by the press time.
In a case where the market’s disappointment from the BoE becomes too heavy and breaks the 181.30 support, the 200 Exponential Moving Average (EMA) level of 180.60 and the 180.00 round figure will challenge the GBP/JPY pair’s further downside.
On the flip side, a clear break of the aforementioned resistance line, close to 183.40 by the press time, could convince sellers to stay in the line. However, they may want to wait for a clear upside break of the yearly high marked in July, around 184.00, for further dominance.
To sum up, GBP/JPY stays on the bear’s radar as markets prepare for the BoE’s dovish hike.
GBP/JPY: Four-hour chart
Trend: Further downside expected
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