GBP/JPY Price Analysis: Finds interim support near 181.00 while broader bias still weak

GBP/JPY finds an intermediate support near 181.00 while the downside seems favored.
Fears of a stealth intervention by the BoJ in the FX domain to defend the falling Japanese Yen may keep the asset under pressure.
GBP/JPY drops after testing the breakdown region of the Symmetrical Triangle pattern.

The GBP/JPY pair discovers some buying interest near 181.00 after remaining under selling pressure from the past few trading sessions. The asset may continue its downside trend the policy divergence between the Bank of England (BoE) and the Bank of Japan (BoJ) would not widen further on expectations that the former is done with hiking interest rates.

The BoE announced a steady interest rate decision last week as higher interest rates are threatening the economic outlook. The United Kingdom’s labor market has lost its resilience as the jobless rate is rising moderately and fresh demand for labor has eased.

Meanwhile, fears of a stealth intervention by the Bank of Japan (BoJ) in the FX domain to defend further downside in the Japanese Yen may keep the asset under pressure.

This week, investors will focus on the UK’s April-June quarter Gross Domestic Product (GDP) data, which will be published on Friday. UK’s GDP is foreseen to expand at a steady pace of 0.2% and 0.4% respectively.

GBP/JPY drops after testing the breakdown region of the Symmetrical Triangle chart pattern formed on a two-hour scale. A breakdown of the aforementioned chart pattern results in wider ticks on the downside and heavy selling volume. The asset is trading below the 200-period Exponential Moving Average (EMA), which indicates that the broader trend is bearish.

The Relative Strength Index (RSI) (14) shifts into the bearish range of 20.00-40.00, which indicates that the bearish impulse is active.

Going forward, a breakdown below September 21 low at 180.82 would drag the asset further toward July 20 low at 179.74 and July 26 low at 176.32.

On the flip side, a recovery move above September 19 high at 183.50 would drive the asset toward September 5 high at 185.75, followed by August 22 high at 186.77.