It has been urged for some corrections on GBPJPY upon the formation of "shooting star" pattern candle on peaks of uptrend at around 185.012 and again at 184.806 levels on daily chart.

We are not isolating this signal, considering previous long term downtrend %D crossover above overbought territory is also spotted out which indicates selling pressures.

It is also important to emphasize that a hanging man candle pattern on monthly chart is a warning of potential price change, not a signal, in and of itself, to go short. Overall pattern on the pair fixes it bearish view for a target of 177.125 to 175 levels in medium terms.

As a result, we now reckon that these bearish patterns have more downside potential and would reveal a medium term downtrend direction.

We have already advised bearish trend in our previous articles as well on 2nd October and again on 7th, We had also stated to maintain the same strategy for hedgers by using these small bounces from then to help our ITM shorts, this would have certainly ensured returns in the form of premiums.

Hereafter, you can have a view on daily charts (the bearish signal spotted as you can see that from circled area, long put instruments to generate positive cash flows here onwards).

With the below technical reasoning, we think arresting potential downside risks of this pair by hedging through Put Ratio back Spread and accordingly, hedging framework was also suggested earlier, for now it is reckoned that the underlying currency GBPJPY to make a large move on the downside.

So, stay firm with longs on 2 lots of At-The-Money -0.50 delta puts would function effectively. By now shorts side of 1 lots of ITM put option would have generated assured returns on the recent rallies, shortly longs on ATM puts are about to function that would take care of potential downswings.