- The GBP/JPY closed in June with solid gains of almost 2%, as depicted by the weekly chart.
- From the daily chart perspective, the GBP/JPY is upward biased, but the pair tumbling below the 20-day EMA exposes the GBP/JPY to further selling pressure.
- GBP/JPY in the near term is neutral-downward biased and might accelerate its losses if sellers reclaim 164.65.
The British pound ended June with gains of almost 2% against the Japanese yen, but on the last trading day of the month, it recorded a loss of 0.19%, extending its fall to three straight days in the middle of a dampened market mood. At the time of writing, the GBP/JPY is trading at 165.24, barely up 0.04% as the Friday Asian session begins.
On Thursday, the GBP/JPY extended its fall, which began on June 28, when the pair reached a weekly high of around 166.94 and made a U-turn, which sent the pair tumbling towards a June 29 low at 169.39. That said, the GBP/JPY opened near the day’s highs and dropped towards the current week’s low around 164.80.
GBP/JPY Daily chart
The GBP/JPY daily chart illustrates the pair as upward biased in the long term, but a break below the 20-day EMA, at 165.44, leaves the cross-currency pair exposed to selling pressure. GBP/JPY sellers need to reclaim the June 23 daily low at 164.65 if they would like to extend the fall. If that scenario plays out, the next support would be the 50-day EMA at 162.69. Otherwise, the GBP/JPY’s first resistance would be the 20-day EMA at 165.44, followed by the June 28 high at 166.94.
GBP/JPY 1-Hour chart
In the 1-hour chart, the GBP/JPY illustrates a negative story in the short term. Since June 28, the pair fell 1.28%, more than 200-pips, courtesy of the Sterling weakness, which has bolstered the yen. In fact, price action is within a descending channel, showing the formation of a bullish flag. Nonetheless, further losses are expected if the GBP/JPY breaks below 164.65. Otherwise, the GBP/JPY first resistance would be the 20-EMA at 165.26, followed by the R1 daily pivot at 165.83, followed by the 200-EMA at1 65.98.
GBP/JPY Key Technical Level
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