Retreats from around 186.00, on risk-off, Japanese authorities intervention

• GBP/JPY trades lower at 184.70, down 0.56%, amid a risk-off environment and potential intervention threats from Japanese authorities.
• The pair shows signs of sideways trading on the daily chart, with a critical support level of 183.35.
• Intraday technicals suggest bearish momentum, as the pair has broken below the Ichimoku Cloud (Kumo).

The Pound Sterling (GBP) losses steam against the Japanese Yen (JPY) after threats of a possible intervention by Japanese authorities. Also, a report from yesterday portraying a global economic slowdown triggered a risk-off impulse, favoring the Yen’s safe-haven status. The GBP/JPY is trading at 184.70, down 0.56%, after hitting a daily high of 185.62.

GBP/JPY Price Analysis: Technical outlook

The daily chart depicts the cross as upward biased, but of late, the GBP/JPY has printed a successive series of lower highs but failed to print lower lows. Hence, the pair is trading sideways, at the brisk of breaking support formed during the last three weeks at around 183.35. If buyers reclaim last week’s high of 186.06, expect a retest of the year-to-date (YTD) high of 186.76. Conversely, a drop towards the top of the Ichimoku Cloud (Kumo), at around 179.96, is possible.

On an intraday basis, the GBP/JPY has broken below the Kumo, turning bearish, but its fall was cushioned by the S1 daily pivot point at 184.48. Once cleared, the next support would be the September 5 daily low of 184.07, followed by the September 1 swing low of 183.53. Conversely, if the pair breaks above the Tenkan-Sen at 184.76 and climbs above the Kumo, that could expose the daily pivot at 185.15.

GBP/JPY Price Action – Hourly chart