The GBP/JPY pair broke the descending triangle pattern by passing its upper trend line. However, the event did not result in a surge, as the pair traded sideways in an almost 50 base point range between 151.00 and 151.50.
The sideways trading ended on Tuesday morning, as the 50-hour simple moving average approached the rate from above and caused a decline. By the start of the day’s European trading, the GBP/JPY had reached the 150.50 mark.
In the case that the rate continues to decline, it might reach the 150.00 level and the lower trend line of a large scale channel down pattern, which has guided the GBP/JPY lower since the middle of October. In addition, note the support of the weekly S1 at 149.93.
Meanwhile, a potential recovery of the GBP/JPY might encounter resistance in the 50-hour simple moving average above the 151.00 level.
