GBP/JPY Price Analysis: Stumbles below 161.00 on risk-off impulse, breaking crucial support areas
- After facing solid resistance at a confluence of EMAs, the GBP/JPY it slid 0.51% on Thursday.
- GBP/JPY: For a bearish resumption, a break below 160.00 is needed; otherwise, buyers would remain hopeful of testing 161.00.
The GBP/JPY slides, after hitting the year-to-date (YTD) high at 162.17, retraces and breaks crucial support levels during the last couple of days as bears drive the GBP/JPY pair toward the 160 handle. At the time of writing, the GBP/JPY exchanges hand at 160.59 as Friday’s Asian Pacific session begins.
Long-term, the GBP/JPY daily chart indicates the pair is neutrally biased after facing a solid resistance area, with the 50, 200, and 100-day Exponential Moving Averages (EMAs), each at 160.83, 161.79, and 161.95, respectively. However, buyers could not hold the GBP/JPY prices at around the previously mentioned EMAs, which opened the door for further losses.
The Relative Strength Index (RSI) shifted course, and after peaking at 58, its slope turned south, while the Rate of Change (RoC) shows that sellers moved in as the GBP/JPY dived towards the 160.60 area.
For a bearish resumption, the GBP/JPY first support will be the psychological 160.00 figure. A breach of the latter will expose the 20-day EMA at 159.97, followed by the 159.00 figure and the February 13 swing low at 158.18.
As an alternate scenario, if the GBP/JPY pair edges north and reclaims the 50-day EMA at 160.83, that would pave the way for testing the 161.00 mark. Once cleared, that will expose the 200 and 100-day EMAs on the GBP/JPY way towards 162.00.