GBP/JPY Price Analysis: Rising wedge challenges recovery around mid-166.00s

• GBP/JPY prints mild gains within bearish chart formation.
• Downbeat MACD signals, clear break of three-week-old previous support line keeps sellers hopeful.
• 100, 200 SMAs can prod bears before directing them to theoretical target of 162.30.
• Bulls need to cross the 167.00 hurdle to retake control.

GBP/JPY remains mildly bid near 166.40 heading into Monday’s London open. In doing so, the cross-currency pair struggles to defend the four-day uptrend inside a short-term rising wedge bearish chart formation.

That said, the bearish MACD signals and the quote’s downside break of an upward-sloping support line from late March, now immediate resistance around 166.80, adds strength to the downside bias.

However, a clear break of the stated wedge’s lower line, close to 165.80 at the latest, becomes necessary for the GBP/JPY bear’s conviction.

Even so, the 100-SMA and the 200-SMA, respectively near 164.00 and 163.00, can challenge the cross-currency pair’s likely fall past 166.80 towards the theoretical target of around 162.30.

It’s worth noting that the monthly low of around 162.80 also acts as an extra filter towards the south.

Meanwhile, GBP/JPY recovery needs to cross the previous support line, close to 166.80, to convince intraday buyers.

Following that, the stated wedge’s top line and the recent high, close to 167.00, may test the upside before defying the bearish chart formation.

In that case, a run-up towards the late 2022 peak of around 169.30 and then towards the 170.00 round figure can’t be ruled out.

Overall, GBP/JPY buyers appear to run out of steam ahead of the key data week for the UK.

GBP/JPY: Four-hour chart

Trend: Pullback expected