GBPJPY has paused its decline around 147.70 but the short-term trend is bearish with increased odds for additional losses. Trend and momentum signals are negatively aligned on the 4-hour chart and adding to the bearish case.
Ichimoku cloud analysis on the 4-hour chart shows the market being below the cloud and the Tenkan-sen and Kijun-sen lines are negatively aligned. Moreover, there was a bearish crossover of the 20-period below the 50-period moving average. These bearish trend signals are pointing to more weakness in the market. Momentum indicators are bearish too but are suggesting the GBPJPY is entering a consolidation phase in the immediate term. RSI is flat and close to oversold levels at 30. MACD is lacking direction.
Should prices fall below 147.65, the next target is 146.65, a previous area of both support and resistance. A sustained move lower from this point would threaten to completely reverse the uptrend from the 141 area in September and would set sights on the key 144 handle. A further decline would bring considerable weakness in the market.
GBPJPY is trading heavily and weak trend signals suggest the short-term bearish bias will remain and a sustained move higher is not expected at this point. The market would need to reclaim the 150-handle to ease downside pressure
