GBP/JPY Price Analysis: GBP/JPY tests the 50-DMA around 151.00 a move beyond is on the cards
- The market mood is in risk-off mode but fails to boost the Japanese yen on risk-flows.
- GBP/JPY: A daily break above 151.00 could expose 153.00.
- GBP/JPY: Failure at 151.00 opens the door for another test to 200-DMA.
The GBP/JPY bounced off the 200-day moving average, is advancing 0.40%, trading at 150.99 during the day at the time of writing.
The market sentiment has not improved throughout the New York session. Investors’ worries about Evergramde’s default and spillover to the Chinese real-estate market, the Federal Reserve’s QE reduction amid rising prices, keeps traders at bay. Despite the risk-off environment surrounding the market, risk-off flows benefit the prospects of the Swiss franc, leaving the Japanese yen behind.
In the meantime, the British pound is strengthening against the greenback, which benefits the Sterling over the yen, struggling to cap the move beyond 151.00.
GBP/JPY Price Forecast: Technical outlook
Daily chart
GBP/JPY today’s price action witnessed the bounce off the 200-day moving average (DMA) at 150.12 and a test to the 50-DMA at 151.37.
If the GBP/JPY buyers would like to resume the uptrend, they would need a daily break above 151.37. in case of that outcome, it could pave the way for further gains. The first resistance level would be 152.00. A breach of that level would expose key supply zones with the confluence of the September 28 high and the 100-DMA around 152.55, followed by 153.00.
On the other hand, failure at the 50-DMA could exert downward pressure in the cross-currency. The first support level would be 150.00. A daily close below that level could push the price towards the September 29 low at 149.79, immediately followed by October’s first low at 149.22.
The Relative Strength Index (RSI) is at 49, aiming higher, supporting the upside bias, but caution is warranted as it remains under the 50-midline.
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