GBP/JPY breaks key support and drops below 150.00

GBP/JPY is trading at the lowest in two weeks, below 150.00. A weak pound pushed the pair to the downside. 

GBP/JPY correction gains momentum 

The pound was moving with a bearish bias and accelerated the decline after the release of UK data. The manufacturing PMI showed a decline to 55.9 in September from 56.9. The number below expectations removed some optimism about the economy. 

Afterwards the pound dropped even further in the market and sent GBP/JPY below 150.00. The pair broke the key area and tumbled to 149.26. From the lows rebounded modesty and at the moment it trades at 149.50/60, more than a hundred pips below Friday’s close. 

Technical outlook 

The pair today is breaking a strong support area, ending a consolidation period. If it holds under 150.00 the outlook would clearly favor the downside. In the daily chart, technical indicators, such as RSI and momentum, turned to the downside from extreme levels, signaling that there is more room for a slide in the pair. 

The bearish pressure would ease with a bounce back above 150.00. The key resistance could be seen at 151.00: a close significantly on top could improve the short-term outlook for the pound. 

For the moment, a potential target is the 20-day moving average that stands at 148.10/20, above the horizontal support of 148.00/10 (May highs).