Search ForexCrunch
  • Dovish comments by BoE’s Saunders added to the recent bearish pressure.
  • Bears are likely to wait for a sustained break below 38.2% Fibo. level support.

The GBP/JPY pair extended its recent corrective slide from over two-month tops and remained under some selling pressure for the third consecutive session on Friday – also marking its fifth day of a negative move in the previous six.
 
The downtick accelerated further following dovish comments by the BoE policymaker Michael Saunders and dragged the cross to two-week lows, though managed to find some support near 38.2% Fibo. level of the 126.67-135.75 move up.
 
The mentioned region – around the 132.40-30 area – coincides with a previous horizontal support and should now act as a key pivotal point for short-term traders and help investors determine the pair’s next leg of a directional move.
 
Meanwhile, oscillators on hourly charts maintained their bearish bias and have just started drifting into the negative territory on the daily chart, suggesting further near-term weakness amid persistent Brexit-related uncertainties.
 
Sustained break through the mentioned support will reaffirm the negative outlook and turn the cross vulnerable to accelerate the slide further towards the 133.00 handle en-route 38.2% Fibo. level support near the 32.30-25 region.
 
On the flip side, the 1.33.00 round-figure mark now seems to act as immediate resistance and any subsequent recovery now seems more likely to remain capped near 23.6% Fibo. level – around the 133.55-60 region.

GBP/JPY 4-hourly chart

fxsoriginal