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  • The GBP/JPY cross rallied nearly 200-pips from the Asian session lows, albeit struggled to capitalize on the momentum and failed near the key 130.00 psychological mark.
  • Given the weekly bearish gap opening below a short-term ascending trend-channel, the near-term set-up might have already turned in favour of bearish traders.

The mentioned channel constituted towards the formation of a bearish continuation – flag chart pattern on short-term charts – and support prospects for the resumption of the near-term depreciating move. Hence, any attempted up-move might still be seen as a selling opportunity amid persistent Brexit-related uncertainties.
Meanwhile, technical indicators have been recovering from the negative territory on the daily chart and again started gaining positive traction on hourly charts, which coupled with fading safe-haven demand, seemed to be the only factor holding investors from placing any aggressive bearish bets and might help limit the downside.
Having said that, a sustained weakness back below the 129.00 round figure mark will reaffirm the negative bias and turn the cross vulnerable to head back towards testing the 128.20-128.00 support area before eventually dropping to the 127.00 handle en-route multi-year lows support near the 126.55 region.
On the flip side, momentum beyond the 130.00 handle might confront some supply near the 130.40-50 region, above which the cross is likely to aim towards surpassing the 131.00 handle and challenge the ascending trend-channel resistance – currently near the 131.30-35 region.

GBP/JPY 4-hourly chart