GBP/JPY technical analysis: Down 43 pips, eyes deeper drop

• GBP/JPY looks south, having dived out of an ascending channel. 
• A break above key falling trendline is needed to confirm bullish reversal. 

GBP/JPY is currently trading at 129.20, having hit a high of 129.63 earlier today.

The 4-hour line chart shows the pair created lower high at 130.00 earlier this week, reinforcing the bearish view put forward by the last week's downside break of the rising channel.

Put simply, the pair is on the defensive and could soon fall to support at 128.60. The bearish case would be invalidated above 130.00, although, as of writing, that looks unlikely, given the risk-off mood in the financial markets.

The outlook would turn bullish if and when the pair clears the resistance of the trendline connecting May 3 and July 25 highs.

4-hour chart

Daily chart

Trend: Bearish

Pivot points