• GBP/JPY extends the previous day’s pullback from 38.2% Fibonacci retracement.
• 200-SMA, seven-week-old support line restrict short-term downside.
• Bulls have multiple hurdles before challenging the yearly top.

GBP/JPY remains pressured towards the 200-SMA as it extends the previous day’s losses to 163.40 during Wednesday’s Asian session. In doing so, the cross-currency pair justifies the recent pullback from the 38.2% Fibonacci retracement level of the August-September upside.

Given the downbeat MACD and RSI (14), are not oversold, the GBP/JPY prices are likely to stay depressed, which in turn favors the odds of breaking the 200-SMA support near 163.00.

However, the 61.8% Fibonacci retracement level and an upward sloping support line from early August, respectively near 162.45 and 161.75, could challenge the GBP/JPY bears afterward.

Should the cross-currency pair drop below 161.75, the bears can aim for the monthly low surrounding 160.65 before directing the sellers towards the 160.00 psychological magnet.

Alternatively, the 38.2% Fibonacci retracement level near 164.30 appears the immediate hurdle for the GBP/JPY buyers to tackle.

Following that, multiple resistances are there between 166.00 and 168.80 to challenge the bulls, a break of which could quickly refresh the yearly top surrounding the 170.00 level.

Overall, GBP/JPY is likely to witness further downside but the room to the south is limited.

GBP/JPY: Four-hour chart

Trend: Limited downside expected