GBP/JPY Price Analysis: Rebounds swiftly from 50% Fibo. level, lacks follow-through

• GBP/JPY stalled its recent bearish trajectory and bounced off the 133.00 support.
• The near-term technical set-up still seems tilted firmly in favour of bearish traders.
• Hence, any subsequent move up runs the risk of meeting with some fresh supply.

The GBP/JPY cross found a decent support near the 133.00 level – marked by the 50% Fibonacci level of the 124.07-142.72 move up – and staged a goodish rebound from the lowest level since early July.

The BoE Governor Andrew Bailey downplayed expectations of negative interest rates and extended some support to the British pound. This, in turn, was seen as a key factor that prompted short-covering move amid slightly oversold conditions on short-term charts.

Given the recent breakthrough an important confluence support near the 137.00 mark, the set-up still seems tilted firmly in favour of bearish traders. The mentioned region comprised of the very important 200-day SMA and a near six-month-old ascending trend-line.

Hence, any subsequent move up might still be seen as a selling opportunity near the 134.55-60 horizontal resistance. This, in turn, should keep a lid on any further gains near the key 135.00 psychological mark, which is followed by 38.2% Fibo. level near mid-135.00s.

On the flip side, bears might now wait for some follow-through selling below the 133.00 mark before positioning for any further depreciating move. The pair might then accelerate the fall further towards the 132.00 level en-route the 131.75-70 support zone and 61.8% Fibo. level.

GBP/JPY daily chart

Technical levels to watch