- The attempted intraday bounce runs out of the steam rather quickly.
- Break below 131.00 handle should pave the way for further downside.
The GBP/JPY cross failed to capitalize on an attempted intraday move up and is currently testing support marked by 50% Fibonacci level of the 126.67-135.75 recent bounce from multi-year lows – around the 131.30 region. This is closely followed by the 131.00 handle – representing the lower end of over two-week-old descending trend-channel.
With technical indicators on hourly/daily charts holding in the negative territory, a sustained breakthrough the mentioned support levels might prompt some aggressive technical selling and turn the cross vulnerable to accelerate the downfall further towards testing 61.8% Fibo. level support – just ahead of the key 130.00 psychological mark.
On the flip side, the 131.80-85 horizontal zone now seems to have emerged as an immediate strong resistance, above which the recovery could get extended towards the 132.20 confluence region. The latter coincides with 38.2% Fibo. level and the descending trend-channel resistance, which should keep a lid on any meaningful recovery for the cross.
GBP/JPY 4-hourly chart
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