- In the overnight session, the GBP/JPY tumbled near 4.50% on concerns over the UK budget.
- The GBP/JPY pierced the 20 and 50-Week EMAs, hoovering around the 100-Week EMA.
- GBP/JPY Price Analysis: Shifted bearish biased, as it broke below the 200-EMA, eyeing a re-test of the YTD low around 148.00.
The GBP/JPY drops as the New York session is about to finish, though recovered after printing a fresh one-year low at around 148.63, on Increasing concerns that the UK’s new budget would likely add to the country’s inflationary pressures amidst the Bank of England’s tightening cycle to quell inflation from double-digit levels. At the time of writing, the GBP/JPY is trading at 154.56, still below its opening price.
GBP/JPY Price Analysis: Technical outlook
The GBP/JPY weekly chart portrays the cross tumbled below the 20, 50, and 100-Week EMAs, though the pair trimmed some of its losses and is back above the 154.80 mark. Oscillators, mainly the Relative Strength Index (RSI), shifted negatively, showing the Japanese FX intervention’s impact alongside the UK’s slowing economic outlook. If the GBP/JPY registers a decisive break below the 100-WEMA at 153.52, that could pave the way for further losses. Otherwise, expect the cross-currency to stay range-bound in the 153.50-158.56 range.
From a daily chart perspective, the GBP/JPY shifted bearish biased once sellers hurdled the 200-day EMA, which, at the time of typing, stands at 160.27, opening the door for further losses. GBP/JPY traders should be aware that the Relative Strength Index (RSI) plunged to oversold levels at 24, which could impede sellers from taking action. Indeed, once the RSI exits from those levels, traders should expect a resumption of the downtrend, targeting the fresh YTD low at 148.53, which could extend towards the September 2020 cycle high of 142.70.
GBP/JPY Key Technical Levels
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