The GBP/JPY cross held on to its modest intraday gains through the first half of the European session, albeit lacked any follow-through buying and remained below the 153.00 mark.

The cross attracted some buying near the 152.35-30 area, or five-week lows touched earlier this Friday and for now, seems to have snapped three successive days of the losing streak. The uptick lacked any obvious fundamental catalyst and could be attributed to some short-covering move ahead of crunch Brexit talks.

The United Kingdom and the European Union are due to enter new negotiations on Friday amid worries that Britain could trigger the so-called Article 16 of the Northern Ireland Protocol. The EU, however, is reportedly prepared to offer more concessions to the UK in a bid to avoid suspension of the post-Brexit trade agreement.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The GBP/JPY failed to recover 153.75 and dropped back under key short-term moving averages, and currently, it stands under 153.00, at one-month lows, looking vulnerable.

The pound needs to quickly recover 153.00 in order to alleviate the bearish pressure. The negative tone will continue to prevail, while below 153.75. If the pound manages to rise above the mentioned level, it could have established an interim bottom. Above, the next resistance is seen around 155.00.

While below 153.00 (horizontal level, and also the 21-SMA in four hour chart) more losses seem likely. The potential target is the 152.25 zone. If the decline continues below 152.00, there is a strong support area at 151.60 that should limit the downside.  A rebound from 151.50/60 seems likely, favoring a pause in GBP/JPY's slide, before another leg lower.

GBPJPY might go for a U-Shaped recovery if 153.36 is broken

Nov 15 2021