Beyond the price pattern itself, the pair’s RSI indicator has also formed a symmetrical triangle over the same period. As a reminder, a breakout in an indicator pattern often leads and confirms a breakout in price itself. Given the recent break lower in RSI, traders can have more confidence that the breakdown in GBP/JPY is legitimate.
To the downside, traders will initially watch for a return to the previous support levels around 169.50 and 168.00. On a longer-term basis, a negative shift in UK economic data could eventually drive the GBP/JPY all the way toward 165.00, the 200-day MA, which has not been tested since late 2012. Of course, a bounce off converging MA support is also possible, but the overall bias will not turn higher unless the pair breaks above previous resistance at 173.50.