GBP/JPY Price Analysis: Struggles near 4-1/2 month lows, 200-DMA/61.8% Fibo. confluence region

• GBP/JPY failed to capitalize on the early attempted recovery move.
• Brexit-related uncertainties continued to weigh on the British pound.
• The set-up favours bears and support prospects for a further decline.

The GBP/JPY cross struggled to capitalize on its attempted intraday recovery move and is currently placed near the lower end of the daily trading range, or 4-1/2 month lows around mid-137.00s set earlier this Monday.

The mentioned region marks a confluence area – comprising of the very important 200-day and 61.8% Fibonacci level of the 130.43-147.93 move up – and should now act as a key pivotal point for short-term traders.

Against the backdrop of persistent uncertainty about the future UK-EU trade relationship and fears of a no-deal Brexit, the set-up remains tilted in favour of bearish traders and supports prospects for a further decline.

However, oversold conditions on the daily chart held investors from placing any aggressive bearish bets. This coupled with a slight improvement in the risk sentiment further collaborated towards limiting the downside.

That said, sustained weakness below the said confluence support might now turn the cross vulnerable to accelerate the slide towards the 137.00 round-figure mark en-route the next major support near the 136.55 region.

On the flip side, the daily swing high, around the 139.20 region – coinciding with 50% Fibo. level – now seems to act as an immediate strong resistance, which should keep a lid on the pair’s attempted recovery move.

GBP/JPY daily chart

Technical levels to watch