The GBP/JPY has successfully broken through the support level of 126.77. Now, the decline with the target to February low 2008 – 125.28 is expected.
Earlier on a 4-hour graph, the GBP/JPY formed the combination of candlesticks Bearish Engulfing, which indicates the downside movement. This candlestick emerged after the currency pair could not breach the mark of 135.00, thus denoting that the bulls did not fixate here and the bears started to increase their influence further.
The breakthrough of Fibonacci correctional level 23.6 confirms this viewpoint. Moreover, the GBP/JPY has formed one more bearish combination of candlesticks Falling Three Methods.
However, in case the resistance level of 130.67 is broken through then short positions should be closed, as it will lead to increase to 135.00.
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