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  • Brexit-related uncertainties led to the overnight breakthrough the 131.30-25 support area.
  • The set-up seems in favour of bearish traders and a further slide towards confluence support.

The GBP/JPY cross now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading band, below the 131.00 round-figure mark through the early European session on Wednesday.
The overnight slide to over one-month lows dragged the cross below an important horizontal support near the 131.25 region – nearing 50% Fibonacci level of the 126.67-135.75 recent strong recovery from multi-year lows.
Given that the cross has been drifting lower along a short-term descending trend-channel formation, the technical set-up remains tilted in favour of bearish traders and support prospects for a further depreciating move.
With technical indicators on hourly/daily charts holding in the bearish territory, a follow-through weakness, toward challenging the trend-channel support near the key 130.00 psychological mark, now looks a distinct possibility.
The latter coincides with 61.8% Fibo. level and should act as a key pivotal point and help determine the pair’s next leg of a directional move amid renewed concerns about the UK’s exit from the EU without a deal.
On the flip side, any attempted recovery back above the 131.00 handle now seems to confront some fresh supply, rather remain capped near the overnight support breakpoint, now turned resistance near the 131.25-30 region.

GBP/JPY 4-hourly chart