GBP/JPY retreats sharply; maintains short-term bearish bias.
GBP/JPY plunged below the 38.2% Fibonacci retracement level of the down-leg from 153.80 to 143.20, around 147.25, which overlaps with the 40-simple moving average in the 4-hour chart. The aggressive bearish rally started during yesterday’s session and has shifted the near-term bias from positive to negative. Also, the momentum indicators are supportive of the bearish picture.
In the short-term, the Relative Strength Index indicator dropped below the 50 thresholds after it bounced off the positive area, while the MACD oscillator lies below the trigger and zero lines.
To the downside, immediate support is being provided by the 146.00 psychological level. Moreover, should prices dip lower again, the next support would likely come from the 23.6% Fibonacci retracement around 145.70. A drop below this level would signal the start of a deeper bearish phase until the 145.30 level.
Should the market surpass the 38.2% Fibonacci, resistance could be met at the 148.10 hurdle, taken from the peak on June 7. If there is a jump above this region, the next major resistance would come from the 50.0% Fibonacci of 148.50. A successful close above this level could see a retest of the 61.8% Fibonacci of 149.75.
Overall, in the medium-term, the pair is continuing the negative outlook after the pullback from the 153.80 resistance level on April 13.
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