• The GBP/JPY cross remained heavily offered for the second consecutive session on Monday and tumbled to fresh multi-month lows, farther below the 134.00 handle.
• Friday's sustained breakthrough over one-week-old ascending trend-channel support was seen as a key trigger for bearish traders and behind a strong follow-through selling.

Given that the pair has confirmed a fresh bearish break through the ascending channel, the set-up remains in favour of bearish traders amid speculations that the UK will leave the EU on October 31 without a deal.

Meanwhile, oscillators on hourly charts are already pointing to near-term oversold conditions and might turn out to be the only factor that might hold investors from placing aggressive bearish bets, or limit any further downside.

Moreover, technical indicators on the daily chart have also moved on the verge of falling into the oversold territory and further warrant caution ahead of this week’s key central bank meetings – the FOMC on Wednesday and the BoE on Thursday.

However, any attempted recovery might now confront some fresh supply near the 134.00 handle and hence, should remain capped near the trend-channel support breakpoint, now turned resistance around the 134.40-50 region.

GBP/JPY 4-hourly chart