GBPJPY continues to trend lower and fell to the lowest levels since mi-March during European session on Friday.
The cross remains in a steep downtrend from 208.11 (July 11 peak, the highest since Aug 2008), fueled by renewed strength of yen, following interventions by Japan’s authorities, while BoE rate cut added pressure on sterling.
Strong bearish signals were generated on surge through rising daily cloud (spanned between 200.39 and 196.71), breach of 200DMA (191.74) and today’s violation of Fibo support at 189.55 (61.8% of 178.73/208.11 upleg).
The pair is on track to end the fourth consecutive week in red, after close of trading in July with the biggest monthly loss since June 2016, added to negative prospects, as reversal pattern is forming on monthly chart.
Deeply oversold daily studies may prompt a partial profit-taking at the end of the week, with upticks to mark positioning for fresh push lower.
Broken 200DMA reverted to initial resistance (191.74), followed by broken Fibo 50% support (193.42) and daily cloud base (196.83), which should cap stronger bounce and keep bears in play.
Targets lay at 185.66 (Fibo 76.4% of 178.73/208.11) and 183.56 (weekly cloud top).
Res: 189.95; 191.74; 193.42; 196.83.
Sup: 188.99; 187.95; 185.66; 183.56.
