GBP/JPY Price Analysis: Subdued around 164.40, above the 20-day EMA

• GBP/JPY barely slides 0.06% in a choppy trading session.
• Sentiment remains negative, thus putting a lid on GBP/JPY gains.
• GBP/JPY Price Analysis: Tuesday’s price action is shrinking, and a bullish-harami is forming in the daily chart, opening the door for further upside.

GBP/JPY slides and erases Monday’s gains due to downbeat market sentiment in the financial markets, triggered by US Walmart blaming inflation as the principal reason to rip its profit forecasts. Meanwhile,  Russia reduced gas flows through Nord Stream 1, and EU countries agreed to use less natural gas for the next winter, reigniting recession fears in the bloc. At the time of writing, the GBP/JPY is trading at 164.39.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY is neutral-to-upward biased, and sellers’ failure on Tuesday to achieve a daily close below the 20 and 50-day EMAs at 164.05 and 163.68, respectively, opened the door for further gains. Despite the previously mentioned, buyers need to further lift the GBP/JPY exchange rate above the three-month-old upslope support trendline-now-resistance around 165.00 to cement the case for a rally to 166.00. Otherwise, GBP/JPY sellers would remain hopeful of dragging prices below 163.00 if they would like to regain control.

GBP/JPY 1-hour chart

The GBP/JPY hourly char portrays the cross-currency pair as neutral biased. On Tuesday, the pair’s price action shrank between the boundaries of Monday, meaning that a bullish-harami chart pattern is forming in the daily chart, which would open the door for further gains. Nevertheless, on its way up, the GBP/JPY’s first resistance would be the  100-hour EMA at 164.54. Break above will expose the 200-hour EMA at 164.76, followed by the July 25 daily and weekly high at 165.08.

On the flip side, the GBP/JPY first support would be the 20-day EMA at 164.39. Once cleared, the next support would be the intersection of the 20-hour EMA and the daily pivot around 164.15, followed by 164.00.

GBP/JPY Key Technical Levels