- GBP/JPY drops the most in a week while reversing from the key hurdle.
- Convergence of 21-DMA, fortnight-long descending trend line guards immediate upside.
- 61.8% Fibonacci retracement level lures bears, 164.30 appears strong resistance.
GBP/JPY stands on the slippery ground as it renews its intraday low near 159.90 during early Thursday morning in London. In doing so, the cross-currency pair prints the first daily loss in five while declining the most in a week.
That said, the pair buyers’ inability to cross the 21-DMA and a two-week-old descending trend line, around 160.80, triggered the quote’s U-turn.
Also adding strength to the downside bias is the looming bear cross between the 50-DMA and the 100-DMA and the former pierces off the latter from above.
With this, the GBP/JPY price is declining towards the last Thursday’s swing low, around 158.50, before directing the bears to the 61.8% Fibonacci retracement level of the September-October upside of the pair, near 157.70.
In a case where the quote remains bearish past 157.70, a downwards-loping support line from December 20, near 153.25, will be important to watch.
On the flip side, the 50% Fibonacci retracement near 160.50 could act as immediate resistance before the 160.80 key hurdle mentioned previously.
It’s worth noting, however, that the GBP/JPY bulls remain off guard unless the quote stays below the 164.30 resistance confluence, encompassing the 50-DMA and 100-DMA.
Overall, GBP/JPY is likely to decline further even if it manages to cross the nearby resistance.
GBP/JPY: Daily chart