GBP/JPY looks oversold; completes 5-month low.
GBP/JPY has been plunging sharply lower since Thursday and reached a more than a 5-month low of 145.40. The pair completed the fourth red day in a row following the significant pullback on the 150.00 psychological level. When looking at the bigger picture the price is creating a bearish correction and fell below the 23.6% Fibonacci retracement level of the last upward movement from 124.00 to 156.60.
From the technical point of view, the market could increase negative momentum in the 4-hour chart. The Relative Strength Index (RSI) is sloping down in the oversold territory, while the stochastic oscillator is also holding in the bearish area.
If price action remains negative, the next level to have in mind is the 38.2% Fibonacci level slightly above the 144.00 level. A slip below the aforementioned level could open the door for the key level of 143.00, taken from the highs in September.
Conversely, if the price creates a bullish movement, then the focus could shift to the upside towards the 148.00 resistance level. If this level is breached, it could increase bullish pressure until the price hits 148.50.
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