GBPJPY has move 1.60% lower on the day.
The JPY is the strongest of the major currencies, while the GBP is the weakest. That has made the GBPJPY the biggest mover of the day. The pair has in fact fallen -1.6% which has outpaced the GBPUSD (down -1.32%).
What does the technical charts say?
Looking at the hourly chart below, the pair moved higher yesterday after basing against the 38.2% retracement of the move up from the September 21 low at 154.671. That rise saw the pair reach up to test its 200 hour moving average and downward sloping channel trendline in the Asian session and London morning session today.
Sellers leaned against those technical levels (near 156.15 area), and although they were certainly rewarded on the BOE decision with more downside momentum, the price was already down at 155.19 at the time of the rate decision (nearly 100 pips from the high).
So risk focused sellers against the 200 hour MA/channel trendline were certainly rewarded on their sale decision (ahead and through the rate decision).
The additional selling post the BOE decision, has now seen the price break below the lower channel trendline (currently at 154.21), and all the way down to 153.25. More recently, the 50% midpoint of the move up from the September 21 low at 153.577 (and swing low from October 12 at 153.678) was also broken. The close risk intraday is now between 153.577 and 153.678. Stay below is more bearish.
On the downside, the next target comes around the 100 day moving average at 152.64. The 61.8% retracement of the move up from September 21 comes in at 152.484. A swing high going back to September 14 is higher at 152.84. So, the area between 152.48 and 152.84 is the next major target area.
Taking a broader look at the daily chart below, the pair created a wide floor between 148.48 and 149.717 between March and September 2021 (see red numbered circles).
From early October, the pair moved sharply higher with the break of the 100 day moving average on October 11 igniting a sharper move higher. After breaking the 100 day moving average the price moved up from 152.6392 to the high for the year at 158.211 over the next eight trading days.
That rise saw the price move above the May high at 156.067. Today, the high price stalled near that old high before moving lower (the high reached 156.23). Sellers started to take back control.
Going forward, the 100 day moving average is a key target on the downside followed by the 200 day moving average at 151.77. Breaking below those levels would open up the door for a potential run back toward the lower swing lows (as long as the daily moving averages can remain broken).
Conversely, if the 100 hour moving average can hold traders would look at the swing highs from September against that moving average and support buyers now as a catalyst for a rebound. The price is still a bit a ways from the moving average level, but it is important to understand the importance of it, in the broader picture.
Is today a start of a new move lower that has legs, or is it the rotation back down toward the moving average support? Time will tell. The levels will help tell the story.