GBP/JPY Price Analysis: Surrenders early gains, slips back below 137.00 mark

• GBP/JPY again started retreating from the 137.40-50 supply region.
• The rejection slide constitutes the formation of a bearish double-top.
• Positive oscillators warrant caution before placing fresh bearish bets.

The GBP/JPY cross failed to capitalize on its early uptick, instead started retreating from the 137.40-50 supply zone. Repeated failures near the mentioned barrier constitute the formation of a bearish double-top pattern on hourly charts.

That said, the prevalent risk-on environment, which tends to undermine the safe-haven Japanese yen, should help limit any deeper losses. Hence, any subsequent fall is more likely to find decent support near the 136.30-25 confluence region.

The mentioned support comprises of 200-hour SMA and over two-month-old ascending trend-line. A convincing breakthrough will confirm a near-term bearish breakdown and pave the way for a further near-term depreciating move.

The pair might then slide below the 136.00 mark and accelerate the fall towards the 135.35 horizontal support. The downward momentum could further get extended and drag the GBP/JPY cross towards the key 135.00 psychological mark.

Meanwhile, technical indicators on hourly/daily charts maintained their bullish bias and warrant some caution before placing any aggressive bets.

On the flip side, the 137.40-50 region might continue to act as immediate strong resistance. A sustained move beyond will be seen as a fresh trigger for bullish traders and lift the GBP/JPY cross further beyond the 138.00 mark.

GBP/JPY 1-hourly chart

Technical levels to watch