• GBP/JPY is back in the red after a volatile Wednesday’s trading.
• The UK’s restrictions amid Omicron pushes back BOE rate hike expectations.
• Looming bear cross on the daily chart points to more downside in the offing.

GBP/JPY is hovering around 150.00, on the defensive after a volatile trading session witnessed on Wednesday.

The cross fell as low as 149.35 before rebounding firmly to finish the day modestly flat at 150.29.

So far this Thursday, the bulls have faded the recovery and given up control amid persistent weakness in the pound.

The cable tumbled to fresh yearly lows of 1.3167 after the UK re-imposed fresh restrictions to curb the spread of the Omicron covid variant. This comes as cases double every few days.

The pair also feels the pull of gravity as the Omicron concerns have pushed back the Bank of England (BOE) rate hike expectations.

However, the downside in the cross remains cushioned by the rebounding US Treasury yields, in anticipation of Friday’s inflation data.

From a short-term technical perspective, GBP/JPY risks additional declines amid an impending bear cross on the daily chart.

The 100-Daily Moving Average (DMA) is on the verge of piercing the 200-DMA from above, flashing a bearish signal.

The 14-day Relative Strength Index (RSI) is trading listlessly below the midline, allowing room for more declines.

A retest of Wednesday’s low remains on the cards should the selling momentum accelerate.

On the flip side, strong resistance appears at Wednesday’s high of 150.70, above which a test of the 151.00 level will be inevitable.

GBP/JPY daily chart

GBP/JPY additional levels to watch