The British Pound (GBP) remains under pressure against the Japanese Yen (JPY), with the pair struggling to hold above the 202.00 level in early European trading on Monday. After peaking near 206.30 in early October, GBP/JPY has entered a corrective phase, moving within a clear descending channel that highlights persistent bearish momentum. Monday’s price action shows hesitation near 203.00, while buyers continue to find it difficult to build upside traction.

The broader sentiment around the Pound remains fragile amid ongoing concerns about the UK’s fiscal outlook. Investors are growing increasingly cautious about the government’s spending plans and long-term debt trajectory, which continues to weigh on Sterling demand. This backdrop has prevented the Pound from capitalizing on the Yen’s weakness, even after Japan’s political news gave the JPY a temporary hit.

Earlier today, reports confirmed that Sanae Takaichi, widely viewed as a fiscal dove, secured sufficient support to become Japan’s next Prime Minister. The development briefly pressured the Yen lower, as markets anticipate continued accommodative fiscal and monetary policies under her leadership. Despite this, the GBP/JPY pair remains largely range-bound, reflecting an indecisive market tone.

Technical outlook: 202.00 support under test, channel bottom eyed near 200.90

Technical indicators suggest that the short-term bias remains tilted to the downside. On the 4-hour chart, the Relative Strength Index (RSI) continues to oscillate around the neutral 50 line, showing a lack of strong directional conviction. However, the structure of lower highs and lower lows over the past two weeks continues to validate the prevailing bearish channel.

Immediate support lies at the 202.00 area — a key psychological and technical level. A decisive break below this region could expose the next downside target at 200.90–200.95, representing the bottom of the descending channel. A move below this zone could open the door for a deeper retracement toward 200.00, where buyers might look to defend the trend.

On the flip side, resistance is now seen near the 203.00–203.10 range, followed by a stronger barrier around 203.50, corresponding to the October 14 swing high. A confirmed break above this ceiling would invalidate the short-term bearish setup and could encourage further recovery toward 204.40–204.50, and possibly the year-to-date high around 205.30.

Outlook

For now, GBP/JPY remains trapped within a choppy but clearly defined downward pattern. The lack of conviction from Sterling buyers, combined with uncertainty around UK fiscal stability, suggests that any recovery attempts may be limited unless broader risk sentiment improves or the Pound finds fundamental support. As long as the pair stays below 203.50, the short-term outlook remains cautiously bearish, with traders watching the 202.00 and 200.90 levels closely for directional clues.