• GBP/JPY snaps three-day uptrend while reversing from six-week top.
• Overbought RSI facilitates pullback from short-term key hurdle.
• Bears need a 200-SMA break for conviction, buyers could aim for yearly high past 166.35.

GBP/JPY remains on the back foot around 165.30 as it stretches the day-start pullback from a short-term key hurdle during the initial European session on Thursday.

That said, the cross-currency pair’s U-turn from a horizontal area comprising tops marked since late July, around 166.25-35, takes clues from the RSI (14) pullback from the overbought territory. Even so, the higher low of the prices and the RSI line portrays the bullish case scenario.

Hence, the quote’s further downside targeting the 165.00 threshold appears more acceptable. Following that, the August 04 peak around 164.00 could lure the GBP/JPY bears.

It should, however, be noted that the pair buyers remain hopeful until witnessing a clear downside break of the 200-SMA, near 162.40 at the latest.

Meanwhile, recovery moves need to provide a successful upside break of 166.35 to please GBP/JPY bulls.

In that case, the highs marked on June 21 and 09, respectively near 167.85 and 168.75, should lure further upside momentum.

Overall, GBP/JPY remains bullish despite the latest pullback.

GBP/JPY: Four-hour chart

Trend: Limited downside expected