GBP/JPY Price Analysis: Pound, under pressure, testing support at 160.90

• The Pound dips 0.5% on the day after failing to confirm above 161.90 Fib. resistance.
• The pair has broken the near-term upward trendline and is now testing the 160.90 support area.
• Below 160.90, the next potential targets are 160.00 round revel and 158.55.

The Sterling is losing ground on Thursday, to put an end to a three-day recovery from the 158.90 area. The pair has lost nearly 0.5% on the day so far,  retreating from Wednesday’s highs at 162.35 to test previous resistance turned support at 160.90.

The pair was unable to confirm the 38,2% Fibonacci Resistance level at 161.90 on Wednesday and has been gaining negative traction on Thursday, amid a sourer market sentiment.

Technical indicators are turning lower

On its reversal, the GBP has broken trendline support from last week's lows and is testing the mentioned 160.90 support area (December 21, 27 highs).

With the MACD in the four-hour chart on the verge of a bearish cross and RSI treading below the 50 level, a confirmation below 160.90 would strengthen bears and open the path toward the 160.00 round level on its way to a three-month low at 158.55.

On the contrary, a positive reaction should reach past the previous trendline support, now at 161.30, and the confluence of Fibonacci resistance and the 50-SMA at 161.80. This would ease negative pressure and set the pair’s focus on the December 28 peak, at 162.30.

GBP/JPY 4-hour chart

Technical levels to watch