GBP/JPY Price Analysis: Remains vulnerable near multi-month lows

• GBP/JPY remains confined in a range near 4-1/2 month lows.
• The technical set-up remains tilted in favour of bearish traders.

The GBP/JPY cross extended its sideways consolidative price action through the early European session on Tuesday and remained confined in a narrow trading band near 4-1/2 month lows.

The cross has been oscillating in a narrow trading band over the past 24-hours or so and managed to hold its neck above an important confluence support, ahead of the 137.00 round-figure mark.

The mentioned region comprises of the very important 200-day SMA and 61.8% Fibonacci level of the 130.43-147.93 move up, which should act as a key pivotal point for short-term traders.

Meanwhile, the pair's inability to register any meaningful recovery suggests that the near-term bearish pressure might still be far from being over amid persistent Brexit-related uncertainties.

However, oversold conditions on the daily chart seemed to be the only factor holding investors from placing any aggressive bearish bets and helped limit deeper losses, at least for now.

Hence, it will be prudent to wait for some strong follow-through selling below the said confluence support before positioning for any further near-term depreciating move.

A subsequent fall below the 136.60-55 region might turn the cross vulnerable to break below the 136.00 mark and accelerate the fall towards the next major support near the 135.30-25 region.

GBP/JPY daily chart

Technical levels to watch