GBP/JPY has been on a recovery rally since hitting lows on August 5, climbing from 180.09 to a peak of 193.49 on September 2. However, signs of weakness are emerging, indicating a possible reversal lower.
Key Points:
- GBP/JPY has sold off sharply from the September peak and broken below a crucial level.
- Further weakness needed to confirm a bearish reversal.
Technical Analysis:
The pair has dropped significantly from the September highs and breached a key support level at 190.26. The Relative Strength Index (RSI) is at 37.77, indicating strong momentum in the recent sell-off.
To confirm a bearish trend, GBP/JPY needs to fall below 189.50, with a potential target at 188.24. On the other hand, a close above 192.00 would suggest a continuation of the August rally towards the 193.49 highs.
Conclusion:
Given the current technical indicators, GBP/JPY is at a critical juncture. A bearish reversal could lead to lower prices, while a bullish move could see a continuation of the rally. Traders should closely monitor price action to determine the next potential direction of the currency pair.
