- GBP/JPY keeps the previous day’s losses around two-week low, depressed of late.
- Monthly bearish channel, sustained trading below previous support line signals further downside.
- 200-SMA appears the key challenge to bears amid sluggish RSI.
GBP/JPY holds lower ground at the intraday bottom surrounding 162.00 as pair traders await the all-important Bank of Japan (BoJ) monetary policy meeting announcements early Friday.
Also read: GBP/JPY rebounds from 162.00 ahead of UK Manufacturing data and BoJ policy
In doing so, the cross-currency pair remains inside a downward-sloping trend channel from March 01 while keeping the early week’s downside break of the five-week-old support-turned-resistance line.
It’s worth noting that the absence of an oversold RSI and the quote’s sustained trading below the 50-bar Simple Moving Average (SMA) adds strength to the bearish bias.
That said, the stated channel’s bottom line, around 161.65 by the press time, appears to put a floor under the GBP/JPY prices. Following that, the 200-SMA level, near 161.20 by the press time, acts as the last defense of the buyers.
In a case where GBP/JPY remains bearish past 161.20, the sellers may aim for the mid-February swing low surrounding 160.50 and the 160.00 round figure.
Alternatively, recovery moves can target the 163.00 round figure but may have a tough time crossing the 163.25-30 resistance confluence, encompassing the aforementioned channel’s top line and the 50-SMA.
Even if the quote rallies past 163.30, the previous support line from early February, near 163.50, could challenge the run-up before directing the GBP/JPY bulls towards the previous monthly peak surrounding 166.00.
GBP/JPY: Four-hour chart
Trend: Further downside expected
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