Bears hold the reins around 162.50 inside the monthly triangle

  • GBP/JPY is showing a 3-day downtrend, remains under pressure lately.
  • A clear break lower in the 50-DMA, bearish MACD signals favor sellers.
  • 21-DMA holds the key to the buyer’s return, the monthly triangle limits short-term moves.

GBP/JPY justifies the previous day’s downside break of the 50-DMA inside a monthly symmetric triangle during Wednesday’s Asian session. That said, the cross currency pair falls to 162.53 while printing the three-day downtrend at press time.

Given the recent breakout of the key DMA quote, as well as bearish MACD signals, GBP/JPY prices are likely to decline further.

In this case, the 100-DMA level around 161.20 could attract sellers before the lower line of the indicated triangle around 160.50 at press time can test further downside.

The previous monthly low around the 160.00 line also acts as a downward filter.

Alternatively, recovery remains elusive until the quote stays below the upper line of the immediate triangle near 163.25 at the latest. It should be noted that the 50-DMA level near 162.85 protects the immediate rise in the quote.

If GBP/JPY prices rally back past the 163.25 hurdle, the 21-DMA level of 164.47 may act as the bears’ last defense.

Overall, GBP/JPY is likely to see further price weakness inside the nearby triangle.

GBP/JPY: daily chart

Trend: further weakness expected