GBP/JPY Price Analysis: Reverses a three-day losing streak, as buyers eye 169.00

• The GBP/JPY would resume upwards after a “quasi hammer” emerges nearby the 168.00 lows, with buyers eyeing 170.00.
• Bearish momentum builds if GBP/JPY fails to reclaim 169.00, as sellers would target a confluence of indicators at around 167.50.

The GBP/JPY achieved three days of losses, though buyers are moving in as the Asian Pacific session begins. After hitting a weekly low of 168.05, the GBP/JPY bounced off, is trading at around 168.85, and gains 0.07% as it’s approaching the 169.00 figure.

GBP/JPY Price Action

The GBP/JPY pair remains upward biased, although it dropped from year-to-date (YTD) highs at 172.32 toward testing the April 19 cycle high at 167.97 resistance-turned-support. Additionally, a one-month-old upslope support trendline drawn from April lows that passes nearby that area and above the 20-day EMA sitting at 167.55 was difficult to crack for GBP/JPY sellers. In fact, Thursday’s price action formed a “quasi” hammer candlestick, suggesting that buyers are moving in, which could pave the way for further gains.

Further cementing the previously mentioned is the Relative Strength Index (RSI) indicator, which shifted direction to the upside after falling towards its neutral area in the previous three trading days.

Therefore, if GBP/JPY reclaims 169.00, a rally toward 170.00 is on the cards. A breach of the latter will expose the May 3 daily high at 170.37 before challenging the YTD high of 172.32. Conversely, a bearish continuation would happen if GBP/JPY drops below the April 19 resistance-turned-support at 167.97, followed by the 20-day EMA at 167.54, which intersects with a support trendline. Downside risks will emerge at 167.00.

GBP/JPY Daily Chart