GBP/JPY Price Analysis: Hammered down to one-month lows, sub-137.00 levels

• GBP/JPY remained under some intense selling pressure for the second straight session on Friday.
• The set-up might have already shifted in favour of bearish traders and points to further weakness.

The GBP/JPY cross witnessed some heavy selling for the second consecutive session on Friday and tumbled to one-month lows during the mid-European session. The cross was last seen hovering near the 137.00 mark, just above the 50% Fibonacci level of the 133.05-140.71 move up.

In the recent price action, the GBP/JPY cross has repeatedly failed to hold on to its gains beyond the key 140.00 psychological mark. The subsequent steep decline might have shifted the bias in favour of bearish traders and supports prospects for an extension of the depreciating move.

The negative outlook is further reinforced by the fact that technical indicators on the daily charts have just started drifting into the bearish territory. Hence, some follow-through weakness, towards testing the 136.00 confluence support, now looks a distinct possibility.

The mentioned level comprises of the 61.8% Fibo. level and a short-term ascending trend-line. This is closely followed by the very important 200-day SMA, around the 135.60 region, below which the GBP/JPY cross seems all set to prolong its bearish trend amid no-deal Brexit fears.

On the flip side, any attempted recovery move might now be seen as a selling opportunity near the 137.70 region (38.2% Fibo. level). This, in turn, should cap the upside near the 138.00 mark. A sustained move beyond, though seems unlikely, might trigger a short-covering move.

GBP/JPY daily chart

Technical levels to watch