The GBP/JPY pair is starting to come back under downside pressure, following a false upside move towards the 140.00 level.
GBP/JPY analysis shows that the pair remains vulnerable to further heavy losses towards the 130.00 level over the medium term.
GBP/JPY medium-term price trend
The British pound is starting to turn lower against the Japanese yen currency, following last week’s bearish policy meeting of the Bank of England.
GBP/JPY technical analysis shows that sustained weakness below the 133.40 level should be extremely bearish for the pair.
The daily time frame shows that price has started to weaken under the GBP/JPY pair’s 50-day moving average.
With this in mind, medium-term weakness in the GBP/JPY is likely while the price trades under the 50-day moving average.
It is noteworthy that the 130.00 and 128.00 levels are seen as likely bearish targets for the GBP/JPY pair before a recovery can begin.
GBP/JPY short-term price trend
GBP/JPY technical analysis shows that the pair is bearish over the short term while the price trades below the 133.80 resistance level.
The lower time frames show that a bearish head-and-shoulders pattern, with substantial downside potential, has formed.
According to the size of the pattern, the GBP/JPY pair could decline towards the 122.00 level over the short term.
Bulls need to move price under the 131.80 level to activate the bearish head-and-shoulders pattern.
Watch out for further short-term losses while the price trades below the 133.80 resistance level.
GBP/JPY technical summary
GBP/JPY analysis shows that a bearish pattern is starting to form. More weakness is expected while the price trades below the 133.40 resistance level.