GBPJPY is clearly biased to the downside in the near term and has broken important support at 150.00. A daily close below this key level would strengthen the short term bearish tendency.
On the 4-hour chart, GBPJPY has also broken below the 200-period moving average which is located slightly below the 150.00 level.
The stochastic oscillator is indicating oversold conditions while the RSI has reached extreme levels. These signals suggest that GBPJPY could pause its decline at current levels before heading lower. The latest big bearish candle points to more softness in the market.
Under current conditions, GBPJPY will likely struggle to make a sustained recovery to the upside. Strong resistance is expected at 152.00. Before this level, there is soft resistance at 151.00 and near the 50-period moving average (151.25). Only a rise above 153.00 would shift the outlook to bullish.
The market holds a weak undertone for now and another leg lower cannot be ruled out. The next target would be 149.00 and then from here, major support at 148.00 comes into view. Below this area, the bigger picture becomes very bearish.
