Bearish Anticipation for GBP/JPY: Key Levels and Technical Analy

GBP/JPY is currently trading at 197.952, showing signs of bearish momentum. The pair has been struggling to maintain higher levels, with selling pressure dominating near psychological resistance levels. Based on technical indicators and market structure, we anticipate a potential decline to 197.033, with a further downside risk to 196.170 if key support levels fail.

Scenarios and Trading Plan

Scenario 1: Targeting 197.033
If GBP/JPY sustains bearish momentum and breaks below the 197.800 intraday support, we anticipate a move to 197.033, which coincides with the 61.8% Fibonacci retracement.
Confirmation Signal: Look for a bearish breakout candle on the H1 timeframe with volume spike or bearish continuation patterns such as a descending triangle.

Scenario 2: Further Downside to 196.170
If the price breaches 197.033, sellers may push GBP/JPY further to 196.170.
This level is significant due to its alignment with the 78.6% Fibonacci retracement and prior support from November price action.
Confirmation Signal: A breakdown with a retest of 197.033 as resistance would provide stronger confirmation for this extended bearish move.
Risk Factors to Watch

Fundamental News:
Any positive developments related to the Bank of England's monetary policy or risk-on sentiment in the market may reverse the bearish momentum.

JPY Sentiment:
Yen tends to strengthen during risk-off periods. If global risk sentiment shifts, GBP/JPY could see increased bearish pressure.

Key Resistance Levels:
If GBP/JPY retraces back above 198.000, it could invalidate the bearish setup.

The technical landscape for GBP/JPY supports a bearish outlook, with the pair likely to test 197.033 and possibly extend losses to 196.170. Traders should monitor the key support levels and bearish confirmation signals, while being mindful of any unexpected market catalysts that could alter the sentiment.