The British pound lost ground against the Japanese yen on Wednesday, with the GBP/JPY pair sliding more than 0.82% after touching a weekly high of 196.39 during the Asian session. As Thursday’s session begins, the pair remains subdued, trading flat around 194.48.
Technical Outlook: GBP/JPY Uptrend Under Pressure
Despite the sharp pullback, the broader uptrend in GBP/JPY remains intact. However, technical indicators now suggest the possibility of a deeper correction. Wednesday’s formation of a bearish engulfing candlestick pattern hints at a potential shift in short-term sentiment, increasing the risk of further downside.
For the bearish case to gain traction, a break below the May 14 low of 194.22 would be necessary. Should that level give way, the next key support lies at the Tenkan-sen line near 193.31, followed by the 200-day Simple Moving Average (SMA) at 192.32, which would represent a more decisive shift in momentum.
On the upside, a recovery above the 195.00 threshold could restore buyer confidence. Immediate resistance would then appear at the 196.00 handle, with a move beyond the May 14 high of 196.39 opening the door for a potential advance toward the psychological 197.00 level.
Traders will closely watch for confirmation signals in Thursday’s session to gauge whether the pair’s pullback is temporary or marks the beginning of a broader retracement.
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