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GBP/JPY Fails to Complete Bullish Continuation Signal

We saw the GBP/USD give a bullish continuation signal with a breakout from this week's falling resistance. The GBP/JPY was in a similar mode this week, trading in a falling channel, and rallied after the BoE proposed a mortgage cap.

(gbpjpy 1h chart, 6/26)

The 1H chart shows the GBP/JPY breaking above the channel resistance, only to fall back during the 6/26 US session. A break below 173 has invalidated the bullish breakout, and suggests a bearish continuation in the 1H chart. 

(gbpjpy 4h chart, 6/26)

The 4H chart shows that GBP/JPY is completing a head and shoulders pattern. Below 172.70 the market opens up the previous support pivot around 171. Watch for a break below the rising trendline and the 4H RSI to dip below 40 to add to the bearish retracement clues.