The GBP/JPY pair has decisively broken down out of a flag pattern on the daily chart. After reaching the 122.03 lows yesterday it has rebounded, however, it will probably resume its down-trend soon until it fulfils its breakout target at around 119.83. Or a closer target would be the monthly pivot at 120.78. A less likely scenario is that it continues to rebound, targeting the 61.8% Fibonacci retrace at around 123.40.

Analysis prepared by:

Joaquin Monfort
Forex4you analyst