GBP/JPY Price Analysis: Bears are showing-up deep in supply territory

GBP/JPY is succumbing to bearish pressures as the multi-timelines are aligned and indicating a significant correction.

The following is a top-down analysis that illustrates where the next opportunity would arise on the downside. 

Monthly chart

The month is drawing to a close in a fourth consecutive month of higher highs and lows. 

The W-formation is a bearish pattern and a significant retracement, at least to the 38.2% Fibonacci that has a confluence with old resistance, would be expected. 

Weekly chart

The weekly chart is overstretched into the supply zone and a significant downside correction, in line with the W-formation on the monthly chart, would be expected. 

Daily chart

The daily chart is showing that the bulls are failing to break higher within the weekly supply area. 

A downside correction to old liquidity and resistance would have a confluence with the 61.8% Fibonacci of the latest bullish impulse. 

4-hour chart

The 4-hour chart is on the way to test old support.

A break of old support and the 21-SMA opens prospects of a downside continuation to the 61.8% Fibo of the daily bullish impulse. 

1-hour chart 

The hourly chart has already tested the support area in what would be expected to be the start of a significant and medium-term bearish correction. 

Should the price correct the recent bearish impulse from the supporting area, then a retest of prior support, or the neckline of the M-formation where a confluence of the 50% and 61% Fibos, is anticipated.  

At such a point that the price is resisted there, bears can look for a downside continuation opportunity from bearish conditions and structure for an optimal entry point on the 15-min chart.