GBP/JPY Price Analysis: Drops back below 200-EMA within key bullish channel

• GBP/JPY prints mild losses while reversing the previous day’s bounce off one-month low.
• Bearish MACD signals, repeated failures to cross 200-EMA keep sellers hopeful.
• 11-week-old ascending trend channel restricts short-term downside, suggests gradual run-up to refresh YTD top.

GBP/JPY consolidates the biggest daily gain in two weeks around 161.60, down 0.30% intraday, during early Friday. In doing so, the cross-currency pair braces for the second consecutive weekly loss while staying inside an upward-sloping trend channel stretched from late December 2022.

That said, the aforementioned bullish channel’s lower line triggered the quote’s rebound the previous day. However, the 200-day Exponential Moving Average (EMA), at 162.00 by the press time, challenged the GBP/JPY upside and paved the way for the pair’s latest fall.

In addition to the failure to cross the 200-EMA, the bearish MACD signals also favor the GBP/JPY sellers to aim for the 160.00 psychological magnet. Though, the stated channel’s bottom line, close to 158.65 by the press time, could challenge the pair bears afterward.

In a case where the cross-currency pair drops below 158.65, the odds of witnessing a south-run targeting the Year-To-Date (YTD) low of near 155.35 can’t be ruled out.

On the contrary, an upside break of the 200-EMA hurdle surrounding 162.00 could trigger a rally targeting the 50% Fibonacci retracement level of the pair’s moves between October 2022 and January 2023, around 163.80 as we write.

It’s worth noting, however, that the bullish channel’s top line surrounding 165.00 could challenge GBP/JPY bulls past 163.80, a break of which could quickly refresh 2023 peak, near 166.00 at the latest.

GBP/JPY: Daily chart

Trend: Gradual upside expected