GBP/JPY Price Analysis: Struggles near multi-week lows, around 61.8% Fibo. level

• GBP/JPY struggled to capitalize on the attempted recovery move to the 136.60 area.
• The set-up favours bearish traders and supports prospects for additional weakness.
• The cross now seems vulnerable to break below the key 135.00 psychological mark.

The GBP/JPY cross retreated around 100 pips from daily swing highs, around the 136.60 region and dropped to fresh multi-week lows during the early European session.

Given the previous day's sustained breakthrough the 137.00 confluence support, the pair's inability to capitalize on the early uptick suggests that the recent bearish pressure might still be far from being over. The mentioned level comprised of the very important 200-day SMA, 50% Fibonacci level of the 131.77-142.72 positive move and a near six-month-old ascending trend-line.

The cross was last seen hovering near the 61.8% Fibo. level and seems vulnerable to prolong its recent sharp pullback from over six-month tops set earlier this month. However, oversold conditions on the 4-hourly chart held investors from placing fresh bearish bets and seemed to be the only factor that might help limit any deeper losses, at least for the time being.

Meanwhile, technical indicators on the daily chart have just started drifting into the bearish territory and support prospects for further weakness. Hence, a subsequent slide towards the key 135.00 psychological mark, en-route the next major support near the 134.60-55 horizontal zone, now looks a distinct possibility amid growing fears of a no-deal Brexit.

On the flip side, any attempted recovery beyond the 136.60 region (session tops) might be seen as an opportunity to initiate fresh bearish positions. This, in turn, should cap any further upside for the cross near the 137.00 confluence support breakpoint, now turned resistance.

GBP/JPY daily chart

Technical levels to watch