GBP/JPY Price Analysis: Slides to near two-week lows, further below 140.00 mark

• GBP/JPY extended last week’s break below a short-term ascending trend-channel.
• A subsequent break below the 140.00 mark paves the way for additional weakness.
• Attempted recovery move might now be capped near the 140.65-70 resistance zone.

The GBP/JPY cross witnessed some heavy selling on the first day of a new trading week and dropped to near two-week lows during the mid-European session. Given last week's breakthrough a short-term ascending trend-channel, a subsequent weakness below the 140.00 mark might be seen as a fresh trigger for bearish traders.

Meanwhile, technical indicators on the daily chart – though have been correcting from higher levels – are yet to confirm the near-term bearish bias. Moreover, oscillators on hourly charts have moved on the verge of slipping into the oversold territory, warranting some caution before positioning for any further depreciating move.

That said, some follow-through weakness below the 139.60 horizontal support will set the stage for an extension of the recent pullback from six-month tops set last Tuesday. The cross might then turn vulnerable to slide below the 139.00 mark and aim towards testing the 138.35-30 intermediate support en-route the 138.00 mark.

On the flip side, any attempted recovery back above the 140.00 support breakpoint might now confront a stiff resistance and remain capped near the 140.65-70 resistance zone. A sustained strength beyond might trigger a short-covering move and lift the cross back above the 141.00 round-figure mark, towards the 141.40 hurdle.

GBP/JPY 4-hourly chart

Technical levels to watch