GBPJPY might be ready for a long-term decline, as price is testing the neckline of its head and shoulders pattern on the daily chart.

A break below this support area around the 150.00 major psychological mark could be followed by a downtrend of the same height as the formation, which spans around 600 pips. However, technical indicators are still suggesting that buyers might return.

The 100 SMA is above the 200 SMA to indicate that bullish momentum is present, and price has yet to test the dynamic support at the 200 SMA. The gap between the indicators appears to be narrowing to reflect weakening bullish pressure.

Stochastic is dipping into the oversold region to reflect exhaustion among sellers, so turning higher would confirm that buyers are taking over. RSI is also turning higher without reaching the oversold region, also indicating that bullish action might resume.

There are no major reports due from the UK this week, although the PMI readings from Markit are worth watching. The manufacturing sector could report a drop from 60.4 to 59.5 while the services sector could see a decline from 59.6 to 59.0, reflecting a slowdown in business growth.

Weaker than expected results could mean more downside for the pound since this would discourage BOE policymakers from tightening or tapering.

Risk sentiment might also determine whether or not a potential GBPJPY downtrend could gain traction. The upcoming Jackson Hole Symposium would likely impact investors’ appetite for risk, as traders are looking to Fed head Powell to drop more clues on the US central bank’s taper timeline.

Any indication that they’re looking to reduce stimulus soon might bring risk-off flows that might favor the safe-haven yen. After all, this could mean some downside for business and consumer activity.