GBP/JPY Technical Analysis: oversold bounce could be short-lived

• The GBP/JPY pair fell to 1.5-month low of 144.10 a few minutes before press time and is currently trading at 144.30 - down close to 2 percent on the day.
• The currency pair is now looking oversold as per the relative strength index (RSI) on the hourly chart and 4-hour chart.
• As a result, a minor bounce could be in the offing, but will likely be short-lived as the 5-day and 10-day exponential moving averages (EMAs) are trending south, indicating a bearish setup. The RSI on the daily is printing bearish below 50.00.
• Further, the S&P 500 has dropped well below the all-important 50-week EMA support of $2,729, opening the doors to February lows below $2,550. So, the safe haven JPY will likely remain bid in the near future and the GBP/JPY looks set to extend the drop to 143.65 (61.8% Fib R of 139.90/149.72).

Hourly chart

Spot Rate: 144.30

Daily High: 144.59

Daily Low: 144.10

Trend: Bearish

Resistance

R1: 144.59 (session high)

R2: 145.00 (psychological hurdle)

R3: 145.55 (downward sloping 50-hour EMA)

Support

S1: 144.00 (psychological support)

S2: 143.65 (61.8% Fib R of 139.90/149.72)

S3: 142.59 (Sept. 4 low)