GBP/JPY Price Analysis: Pulling back within Broadening formation

• GBP/JPY has likely formed a Broadening topping pattern. 
• It has just reversed after touching the top of the pattern and looks poised for a down-leg. 
• The overall long-term trend, however, is bullish with a breakout from the pattern required to reverse. 

GBP/JPY appears to be forming a bearish Ascending Broadening Wedge formation. The pair has just rallied to the pattern’s upper boundary line before forming a double top and pulling back. There is now a good chance it has begun the next down-leg of the pattern. 

A decisive break below support at the 187.96 March 11 lows and the nearby 50-day Simple Moving Average (SMA) would confirm a continuation of the next down leg within the wedge.  

Pound Sterling versus Japanese Yen: Daily chart

Such a move would probably see GBP/JPY fall to support near the 50-week Simple Moving Average (SMA) at 181.60. 

It is worth noting that although a deep correction looks on the cards, over the long-term, the peaks and troughs of price are rising. This likely indicates GBP/JPY is in an overall uptrend, which is likely to continue as long as price does not break completely out of the bottom of the wedge at around 180.80-90. A downside breakout, however, would confirm a reversal of the long-term uptrend. 

A break above the 191.32 highs would provide confirmation the dominant bull trend was intact and continuing higher. Although it looks overstretched, such a move is still possible given the overall bullishness of the chart. The next upside target from there would probably be resistance at the 195.88 highs of 2015.