Pound bulls, take care!
Guppy's 4-hour time frame is producing a shaky head and shoulders pattern, and the price is now testing the neckline at approximately 166.00.
A decline that is the same height as the chart formation, which spans around 600 pip, might be triggered by breaking below this support region.
Moving averages support this collapse scenario because the 100 SMA just crossed below the 200 SMA in a negative direction. The pair is also gradually slipping below the dynamic inflection point of the 100 SMA.
Since the oscillator is already dropping near to the oversold level, Stochastic is indicating that sellers may need to take a break soon. A higher turn would indicate that buyers are once again active and may allow the floor to hold.
In such case, the GBP/JPY pair can turn its attention back to the upward targets at 170.00 and 172.00.
In any case, watch out for breakthrough or reversal candlesticks right here!
