The GBP/JPY cross witnessed heavy selling during the early European session and dropped to a fresh daily low, around mid-153.00s in the last hour.

The cross gained some positive traction during the early part of the trading action on Tuesday, albeit struggled to capitalize on the move and met with a fresh supply near the 154.20 region. The sharp intraday pullback lacked any obvious fundamental catalyst and could be solely attributed to a strong pickup in demand for the Japanese yen.

Concerns over the rising number of COVID-19 cases in Europe and the reimposition of restrictive measures tempered investors' appetite for perceived riskier assets. This, in turn, was seen as a key factor that prompted aggressive short-covering around the safe-haven JPY and led t the GBP/JPY pair's latest leg of a sudden fall in the past hour.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Given the firmer RSI line, the pair buyers are likely to overcome the immediate hurdle around 154.10. However, the 200-SMA level of 154.90 will be a tough nut to crack for the GBP/JPY bulls afterward.

Even if the quote rises past 154.90, the 155.00 threshold and 61.8% Fibonacci retracement of October-November downside, around 156.00, will challenge additional upside.

On the flip side, pullback moves may retest the 153.00 round figure ahead of challenging the monthly low near 152.40.

Should GBP/JPY bears dominate past 152.40, multiple levels marked during early September around 152.20-25, followed by the 152.00 psychological magnet, will question the further downside.

GBPJPY Falls Below the Trend Line

Nov 23 2021