GBP/JPY takes offers to refresh intraday low around 167.50 during Friday’s sluggish morning. In doing so, the cross-currency pair extends the previous day’s pullback from 168.85 amid bearish MACD signals.

As a result, the sellers are all set to poke the 200-HMA support surrounding 167.40. However, an upward-sloping trend line from December 02, close to 167.20 by the press time, could challenge the GBP/JPY bears afterward.

Also acting as the downside filter is an eight-day-long ascending trend line near 166.95, as well as the weekly low near 166.70.

In a case where the GBP/JPY pair remains bearish past 166.70, the December 07 swing low near 166.00 could act as the last defense of the buyers.

Alternatively, recovery moves may initially aim for the 168.00 round figure before challenging the downward-sloping resistance line from Tuesday, close to 168.75.

Following that, the monthly high near 169.30 and the 170.00 psychological magnet could gain the GBP/JPY buyer’s attention.

It’s worth noting that the GBP/JPY pair’s successful run-up beyond 170.00 enables the bulls to aim for the yearly top surrounding 172.15, marked in October.

Deeply overbought GBP/JPY on a break of 166.21, targets 164.10 and eventual 159.87 and 159.77.

Holding GBP/JPY at current levels are averages in the 150's. Not much to report except shorts from today until 159.00's trade.

Furthermore, a bleak outlook for the UK economy might hold back traders from placing aggressive bullish bets around the Sterling Pound. The aforementioned fundamental factors make it prudent to wait for a strong follow-through buying before positioning for any further appreciating move for the GBP/JPY cross.

Overall, GBP/JPY is likely to remain bearish but the road toward the south is long and bumpy.

GBPJPY Playing Dovish on British Bleak Economic Outlook

Dec 17 2022