GBP/JPY Price Analysis: Seems vulnerable below 1-month-old ascending channel

• GBP/JPY met with some fresh supply on Thursday, albeit held above the 141.00 mark.
• The overnight break below an ascending channel supports prospects for further slide.
• Mixed technical indicators on 4-hourly/daily charts warrant some caution for bears.

The GBP/JPY cross failed to capitalize on the overnight goodish rebound, instead met with some fresh supply on Thursday and was last seen trading near the 141.25 region.

Looking at the technical picture, the cross on Wednesday confirmed a bearish break through a 1-1/2-week-old ascending trend-channel and seems vulnerable to slide further. Meanwhile, technical indicators on the 4-hourly chart have moved on the verge of breaking into the negative territory and add credence to the bearish outlook.

However, oscillators on the daily chart maintained their bullish bias and have also eased from the overbought zone. Moreover, the cross has been showing some resilience below the 100-hour SMA. This makes it prudent to wait for a sustained break below the 141.00 mark before traders start positioning for any further near-term depreciating move.

Below the mentioned level, the cross is likely to extend the recent corrective slide from six-month tops and accelerate the fall further towards challenging the key 140.00 psychological mark. The latter marks a previous strong resistance breakpoint and should now act as a key pivotal point for the pair’s next leg of a directional move.

On the flip side, any attempted recovery might now confront some fresh supply near the 141.75 region and is more likely to remain capped near the 142.00 mark. That said, some follow-through buying has the potential to lift the cross further beyond the 142.70 region (weekly tops), towards reclaiming the 143.00 round-figure mark.

GBP/JPY 1-hourly chart

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Technical levels to watch