The GBP/JPY cross trimmed a part of its intraday losses to the lowest level since October 4 and was last seen trading around the 150.80-85 region, still down 0.20% for the day.

The cross struggled to capitalize on its modest intraday gains, instead met with a fresh supply near the 151.60-65 area amid the emergence of fresh buying around the safe-haven Japanese yen. Investors now seem worried about the potential economic fallout from the spread of a new vaccine-resistant variant of the coronavirus. This, in turn, triggered a fresh wave of the global risk-aversion trade, which was evident from a selloff in the equity markets. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

the sellers cheer downside break of 200-DMA and 61.8% Fibonacci retracement (Fibo.) of July-October advances amid bearish MACD signals.

Hence, the latest declines are likely to last longer with the 78.6% Fibo. level near 150.50 acting as the immediate support.

Adding to the downside filters is a four-month-long support line near the 150.00 round figure, a break of which will make the quote vulnerable to test September’s low of 148.95.

Alternatively, 61.8% Fibonacci retracement level and 200-DMA, respectively near 152.50 and 153.65, restrict the short-term upside of the pair.

However, GBP/JPY bulls may not take risk of entries until witnessing a clear upside break of a descending resistance line from October 21, around 153.80 by the press time.

Meanwhile, the pair's inability to gain traction favours bearish traders and supports prospects for an extension of the recent pullback from over five-year high touched in October. Hence, any recovery back above the 151.00 mark might be seen as a selling opportunity and runs the risk of fizzling out rather quickly

Breaking Below 150.0 Would Open Doors For 149.0

Nov 30 2021