GBP/JPY Price Analysis: Tumbles from weekly highs as sellers eye 159.50

• The GBP/JPY prepares to finish the week with losses of almost 0.50%.
• The cross-currency daily and hourly charts suggest that a mean reversion move towards 162.83 could be on the cards.

The GBP/JPY plummeted on Thursday, failing to crack the 50-day EMA at 164.12, so the pair tumbled towards its daily low at 161.12 before recovering some ground and settling near current exchange rates. As the Asian Pacific session begins, the GBP/JPY is trading at 161.47, registering a minimal losses of 0.06%.

GBP/JPY Price Analysis: Technical outlook

Once the dust settled, after the Bank of England acknowledged that the UK might tap into a recession, the GBP/JPY daily chart shows sellers are in control, tuned in with the Relative Strength Index (RSI), in bearish territory, and below its 7-day RSI’s SMA. Despite some selling pressure lying in the cross, the move’s size suggests a possible mean reversion impulse before extending downwards.

Unless the GBP/JPY decisively breaks below the August 4 low at 161.12, a pullback towards the 100-day EMA at 162.83 is on the cards.

 GBP/JPY Hourly chart

In the near term, the GBP/JPY is neutral-biased but slightly tilted downwards. Failure to conquer 164.00 leaves the pair exposed to selling pressure, so bears could be piling around the confluence of the 200-hour EMA and the 61.8% Fibonacci level, around the 162.84-162.93 area. However, if the cross-currency pair tumbles below 161.00, a re-test of the weekly low at 159.44 is on the cards.

GBP/JPY Key Technical Levels