- The overnight attempted move up ran out of the steam near 100-hour SMA.
- The recent corrective slide from two-month tops might still be far from over.
The GBP/JPY cross gained some positive traction on Thursday following the news that Tories – including those who opposed the previous deal – and the DUP extended support to the UK Prime Minister Boris Johnson’s new Brexit proposal. The positive momentum, however, lacked any strong follow-through and quickly fizzled out near 100-hour SMA.
The cross remained depressed and was seen oscillating in a narrow trading band – just above one-month lows – through the early European session on Friday. This marked the fourth consecutive day of a downtick for the cross and also the ninth session of a weaker mood in the previous eleven, suggesting that the near-term bearish pressure might still be far from over.
This coupled with the fact that the recent pullback from over two-month tops has been along a descending trend-channel further reinforces a well-established downtrend. Hence, a slide towards challenging a support marked by the lower end of the mentioned trend-channel, currently near the 131.00 round-figure mark, now looks a distinct possibility.
The mentioned handle coincides with 50% Fibonacci level of the 126.67-135.75 recovery move, which if broken should prompt some fresh 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 132.00 handle now seems to act as immediate resistance and any subsequent recovery attempt might continue to confront some fresh supply near 100-hour SMA – currently near the 132.30 region. This should eventually cap the cross near the trend-channel resistance – coinciding with the overnight swing highs near the 132.50-55 region.
GBP/JPY 1-hourly chart
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