GBPJPY is in a downtrend since the May 10 high of 148.09, with prices falling in a descending channel and touching a low of 138.65 this week. The short-term bias turned more bearish after breaking below the 50-day moving average last week. The market is now holding below the base of the daily Ichimoku cloud, giving a bearish setup. Prices are also capped under the tenkan-sen line. Meanwhile, momentum studies are also bearish, since RSI is below 50 and MACD is below zero.

In the near-term, GBPJPY is finding support from the 200-day moving average at 138.87 and is finding resistance at 140.36 and has not recorded a daily close above it in the past two days. This level is the 61.8% Fibonacci retracement level of the upleg from 135.58 (April 17) to 148.09 (May 10).

The market is now at a critical point. If support at the 200-day moving average fails to hold, then there would be an accelerated decline towards the 135.58 (April 17). At this point, the market would have retraced all of the uptrend from 135.58 to 148.09, and a deeper decline would strengthen the bearish outlook for the medium-term picture.

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A rise above the June 2 high of 143.93 (top of the cloud) is needed to shift momentum back to the upside to target resistance at the 23.6 Fibonacci at 145.14. A move above 147.00 would help bring a resumption of the April to May uptrend.

For now the short-term bias is bearish within the descending channel, while the medium-term picture is neutral since the beginning of the year.

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