GBP/JPY Price Analysis: Rejected at the 200-DMA, drops towards 161.20s
- GBP/JPY bulls failed to conquer the 200-day EMA at 161.81 and erased their earlier gains.
- GBP/JPY Price Analysis: A bearish flag emerged at the 1-hour chart, which paved the way for further downside.
The GBP/JPY retreats after reaching weekly highs at 161.46 and drops beneath 161.30 as Thursday’s Asian Pacific session begins. Even though the GBP/JPY remains upward biased unless it breaks crucial support levels. At the time of writing, the GBP/JPY exchanges hands at 161.27, below its opening price by a minuscule 0.05%.
From a daily chart perspective, the GBP/JPY is neutral biased, though an uptick toward 161.81, which would put into play the 200-day Exponential Moving Average (EMA). A break of resistance and the 100-day EMA at 161.98 would be next, ahead of 162.00. Once all those supply areas are hurdled, the GBP/JPY would rally towards 163.00, ahead of the December 20 daily high at 167.02.
In the meantime, the GBP/JPY 1-hour chart suggests the pair as neutral biased, though slightly tilted downwards, as a bearish flag emerged. In addition, the Relative Strength Index (RSI) turned bearish, while the Rate of Change (RoC) depicted that buying pressure waned.
Hence, the GBP/JPY Is poised downwards. The first demand zone to be tested would be the 50-EMA at 161.04. A breach of the latter and the GBP/JPY pair would fall to the bottom of the bearish flag at 160.72. Once cleared, GBP/JPY prices would be driven toward the 100-EMA at 161.49, ahead of the 200-EMA At 159.95.