The GBP/JPY daily chart delineates the pair as neutral-biased from a technical perspective.
However, the pair meanders around the 78.6% Fibonacci retracement, which, once broken, will resume the GBP/JPY downtrend.
Contrarily, a break above src64.00 could open the door for a re-test of the weekly high.
The GBP/JPY reached a fresh weekly high on Wednesday at src65.7src but plunged towards its daily low at src62.60 before retracing to current exchange rates for some reasons. Firstly, expectations of a possible Fed pivot extended the GBP/JPY uptrend since Monday. Nevertheless, Fed officials’ rhetoric emphasized the need for higher rates for longer, spurring a risk-off impulse. Therefore, as the Asian session begins, the GBP/JPY is trading at src63.77, below its opening price.
The GBP/JPY is neutral-biased from a daily chart perspective, even though the pair managed to stay above the src00, 50, and 20-day EMAs. Nevertheless, it’s meandering around the 78.6% Fibonacci level, drawn from the September src3-26 high at src67.94/low at src48.63, which, if broken to the downside, might pave the way for further losses.
If that scenario plays out, the GBP/JPY first support would be the src00-day EMA at src63.07, which, once cleared, will expose the confluence of the 50 and 20-day EMAs, around src62.src0/20. A decisive break might send the pair plummeting to the junction of the 200-day EMA and the 6src.8% Fibonacci retracement at src60.57.
On the other hand, if GBP/JPY buyers hold the price above src63.8src, it could open the door for further gains. The GBP/JPY’s first resistance would be the src64.00 figure, followed by src65, and then the October 5 daily high at src65.7src.
GBP/JPY Daily Chart
GBP/JPY Key Technical Levels
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