GBP/JPY Price Analysis: Tumbles below 164.00, approaches the H4 head-and-shoulders target
- GBP/JPY is set to finish the week with decent losses of 1.28%.
- From a daily chart perspective, the cross-currency GBP/JPY shifted to neutral biased.
- Short term, the GBP/JPY is about to hit 162.30. the head-and-shoulders target.
The GBP/JPY drops for the four consecutive trading session, down by 0.86% on Friday, after Wall Street finished the last trading day with losses between 0.45% and 0.90%, spurred by a dismal sentiment. In the FX complex, safe-haven peers rose, except for the greenback, which finished unchanged. At the time of writing, the GBP/JPY is trading at 163.24, as Wall Street’s close.
GBP/JPY Price Analysis: Technical outlook
From a daily chart perspective, the GBP/JPY is neutral biased, after sliding below the 55-day EMA. It’s worth noting that the cross, tumbled below the August 17 daily low at 163.55, opening the door for further losses. Even though, the GBP/JPY reached a daily low at around 162.73 and failed to stick below 163.00, the bias shifted to neutral-downwards.
Short term, the GBP/JPY four-hour scale depicts the cross-currency pair formed a head-and-shoulders chart pattern, which targets a drop towards 162.30, as measured from head-to-the-neckline chart pattern. On Friday, the GBP/JPY tumbled from around 164.50, and reached a daily low at 162.73, shy of the target. Nevertheless, the GBP/JPY bias remain downwards, so it might reach the head-and-shoulders target, in the near term.
Therefore, the GBP/JPY first support would be the 163.00 psychological level. A breach of the latter will expose the September 16 cycle low at 162.73, followed by the head-and-shoulders target at 162.30.