- 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
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