• The British pound retreats from weekly highs, 120-pips on risk-off market mood.
• GBP/JPY Technical Outlook: Remains upward biased, but GBP bulls need to reclaim above the 50-hour SMA.

On Thursday, the GBP/JPY falls for the second consecutive day, retreating from weekly highs around 157.70s, down close to 100-pips in the day. At the time of writing, the GBP/JPY exchanges hand at 156.53, losing 0.28%. The market mood is downbeat as portrayed by US equities falling between 0.55% and 1.36%. In the FX market complex, the safe-haven peers like the JPY and the CHF advance, while the US dollar continues to be hit by substantial sell-off across the board.

GBP/JPY Price Forecast: Technical outlook

In the overnight session for North American traders, the cross-currency pair was subdued around the 157.00-40 range. But, as the market mood deteriorated, appetite for safe-haven increased, thus sending the GBP/JPY tumbling towards the daily low at 156.31, near 10-pips short of the S2 daily pivot.

A previous GBP/JPY analysis noted that “the GBP/JPY is upward biased,” but also emphasized that “the high reached on January 5 at 157.76, short of October 20, 2021, at 158.22, exposed the GBP/JPY to downward pressure.”

That said, the GBP/JPY retreated 120-pips from the weekly high at 157.72, attributed to risk-aversion meandering in the market.

On the downside, the GBP/JPY next demand area would be the psychological 156.00 figure. A break under that level would expose the January 4 daily low at 155.34. and then the January 3 daily low at 154.90.

To the upside, the first resistance level would be the 200-hour simple moving average (SMA) at 156.81. A decisive break above that level would expose the 100-hour SMA at 157.00, followed by the 50-hour SMA at 157.14.