- GBP/JPY extends its losses, from around 163.00 to 160.60 in the last four days.
- Risk aversion in the FX space underpins safe-haven peers.
- GBP/JPY: To resume its downward bias below 160.34; otherwise, a test of 162.07 is on the cards.
The GBP/JPY stumbles and refreshes two-week lows, eyeing a break below the July 6 low at 160.38, which could exacerbate a move towards the August 2 low at 159.44, ahead of the 200-day EMA at 158.65. At the time of writing, the GBP/JPY is trading at 160.69, down 0.75, due to a risk-off impulse in the FX space, to the detriment of risk-sensitive currencies, namely the GBP, AUD, and NZD.
GBP/JPY Price Analysis: Technical outlook
The longer-term of the GBP/JPY is neutral-to-downward biased as shown by the daily chart. Succesive series of lower highs/lows, alongside the Relative Strength Index (RSI) aiming downwards and below its 7-day RSI SMA, exacerbated the cross fall in the last four days. Also, the 20-day EMA is about to cross under the 100-day EMAat 162.97, which would exert additional selling pressure on the pair. That could send the GBP/JPY towards the 200-day EMA at 158.65.
Therefore, the GBP/JPY’s first support would be the August 15 low at 160.34. Break below will expose the July 6 low at 160.38, followed by the August 2 low at 159.44, followed by the abovementioned 200-day EMA.
On the flip side, the GBP/JPY’s first resistance would be the August 15 high at 162.07. Once cleared, the next resistance will be August 12, high at 162.79, followed by the 163.00 figure.