Challenges 3-month old ascending trend-line support, around 137.00 mark

GBP/JPY witnessed heavy selling and extended last week’s rejection slide from the 140.35-40 hurdle.
Some follow-through weakness below monthly lows support will set the stage for further weakness.
Oversold RSI on hourly charts warrants some caution before placing aggressive intraday bearish bets.

The GBP/JPY cross opened with a bearish gap on the first day of a new trading week and continued losing ground through the first half of the European session. The downward momentum dragged the cross back below 200-day EMA, with bears now eyeing some follow-through weakness below the 137.00 mark.

Given that the GBP/JPY cross has been struggling to break through the 140.35-45 supply zone, a subsequent fall below monthly lows will be seen as a fresh trigger for bearish traders. The mentioned level coincides with a three-month-old ascending trend-line support and should act as a key pivotal point for short-term traders.

Meanwhile, technical indicators on the daily chart have just started drifting into the bearish territory and add credence to the bearish bias. However, RSI on hourly charts is already flashing oversold conditions and should help the GBP/JPY cross to find some support at lower levels.

This makes it prudent to wait for a sustained break below the mentioned trend-line support before confirming that the GBP/JPY cross has topped out in the near-term. This, in turn, will set the stage for a further near-term depreciating move back towards the key 135.00 psychological mark.

On the flip side, any meaningful recovery attempt now seems to confront a stiff resistance near the 138.00 round-figure mark. Some follow-through strength beyond the 138.20-25 region might trigger a short-covering move and push the GBP/JPY cross beyond the 139.00 round-figure mark