GBPJPY pulled back from the day’s low of 159.78 when it was 2.9% lower to rise back above the 161 level. However, the momentum indicators are still in negative territory.
RSI is just below oversold level and the stochastics have been stuck below that level since the current descent started at the beginning of February. This indicates that some consolidation or a correction is possible. Prices breaking out of the lower Bollinger Band also adds to the likelihood of a rebound in the near term.
Having already broken below the key 160 level, the 159 level is the next support level in view if prices continue to head lower. The bearish outlook is unlikely to shift anytime soon as the pair moves further below the moving averages. Prices would need to target the upper half of Bollinger band to significantly weaken the current bearish bias but may find resistance at 165 before achieving this.
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