GBP/JPY has been consolidating since last week and now threatening to put in a price bottom. Let's take a look at the technical outlook. GBP/JPY 4H Chart 4/7(click to enlarge) Short-term Bullish Outlook: The 4H chart shows the consolidation range between roughly 176.50 and 178.45. During the 4/6 session, price pushed towards the resistance level, but stalled to end the session. Note that price is still trading under the 100-period SMA, and the RSI is still holding under 60. This shows that there is still bearish bias and momentum in this time-frame. Now, if price breaks above 178.45 and the 4H RSI pushes above 60, we are probably going to see some near-term push towards the common resistance and psychological level of 180 up to the 180.50 level where the 200-period SMA resides. Also note a falling trendline from 185.00 (Feb-March highs) that would reinforce the 180-180.50 area as resistance. Failed Bullish Attempt: However, if price fails to break 178.45, or does so but retreats back below 177.50, the pressure will remain on the 176.50 support with risk of extending lower because of the prevailing downtrend in the 4H chart. But what about the daily chart? GBP/JPY Daily Chart 4/7(click to enlarge) Bearish Scenario for the Medium Term: In the daily chart, we see a relatively sideways market after the rally in October-November 2014, from 168 to about 189.70. It is possible the the retreat from 178.70 to 176 was a correction, and that we are currently in another wave of correction that will bring GBP/JPY below the 175.50-176.00 lows. If it does so, we should first respect the support area between 168 and 170, especially if the RSI drops below 30, and especially if there is a bullish divergence. So, if price breaks the short-term range support at 176.50, we should anticipate a subsequent break below the 2015-low around 175.50 and the introduction of a bearish outlook in the medium-term. This would probably require a major shift in either the BoE or the BoJ ie. BoE starts cutting rates and/or the BoJ announcing plans to wind down its stimulus measures. Bullish Outlook: Now, as noted above, a break above 178.45 opens up the 180 level, which we can see is a common resistance area in the daily chart. A break above 180 would be an early warning that GBP/JPY is ready for bullish continuation. However, a break above 182 might be needed to liberate GBP/JPY from its current bearish correction mode, and revive an uptrend that would open up the 185 high and then the 189.70 high of 2014.