• GBP/JPY has retreated from a two-month peak of 185.95, now trading around 184.92, as the market's risk-on mood tempers the pair's recent rally.
• A decisive move above the 186.00 level could set the stage for a test of the YTD high at 186.76.
• On the downside, a drop below 184.00 could lead to a deeper correction, with supports seen at 183.36, 183.06, and the Kijun-Sen at 182.76.

GBP/JPY suffered a minimal dip on Tuesday after hitting a fresh two-month high at 185.95 and exchanging hands at 184.92, with buyers surrendering the 185.00 figure amid a risk-on impulse.

The pair is neutral to slightly upward biased after the pair broke above the latest cycle high reached in October 31 at 184.29, which opened the door for further upside. If the cross-pair reclaims the 186.00 figure, that can open the door to challenge the year-to-date (YTD) high at 186.76.

However, if GBP/JPY drops below 184.00, that could exacerbate further losses, with key support levels in play. The first support would be the Tenkan-Sen at 183.36, followed by the Senkou-Span A at 183.06. A breach of the latter would expose the Kijun-Sen at 182.76, followed by the top of the Ichimoku Cloud (Kumo) at 181.66.

GBP/JPY Price Action – Daily Chart

GBP/JPY Technical Levels