GBP/JPY falls to 4-week lows ahead of the Bank of Japan

GBP/JPY continues to move with a bearish bias as it has been the case since early September when it changed its trend after reaching 138.83. From there it lost almost 700 pips and is now again looking at 2016 lows.

On Friday, momentum turned even more negative after the pair dropped below the 20-day moving average that stands at 135.10. Today it rose during the Asian session and reached 133.10 but the recovery was short-lived and it resumed the decline.

After breaking below 132.40 (yesterday low) it accelerated and it bottomed at 131.64, the lowest since August 23. It was trading at 131.92/96, down 0.65% for the day.

The decline is taking place amid a weak pound and ahead of the Bank of Japan decision that will take place during Wednesday’s Asian session.

Technical levels to watch

To the downside, support levels could be located at 131.60/65 (daily low), 130.00 (psychological) and 129.15 (Aug low). On the opposite direction, resistance might be seen at 132.40 (Sep 19 low / 20-hour moving average), 133.10 (daily high) and 133.45/50 (Sep 19 high).