GBP/JPY Price Forecast: The Pound dives further, approaching 198.00

• The Pound extends losses to levels near 198.00, depreciating more than 1% so far this week.
• Hawkish comments by BoJ policymakes are keeping the Yen buoyed.
• The Pound suffers on concerns aout UK's fscal health and growing political uncertainty.

The British Pound keeps heading lower on Wednesday against a firmer Japanese Yen, and is on track for a more than 1% depreciation in the last three days, following a reversal from the 200.00 level, and is about to test a key support area at 198.00

The Pound has been hammered by a combination of Yen strength, as comments from BoJ officials have raised expectations of further monetary tightening in the coming months, concerns about the UK fiscal health, and an increasing political uncertainty.

Technical analysis: There is a key support at 197.80-198.00

GBP/JPY sellers are in charge since the pair confirmed the reverse trendline at 200.50 earlier this week. That said,  the 4-Hour RSI is entering oversold levels near a key support area below 198.00, which suggests that some consolidation or a corrective rebound might take place at this point.

Bears are likely to be challenged in the area between 197.80 and 198.00, which capped downside attempts in August 20 and 29.  Further down, the targets are the 197.35 intra-day level and the August 7 low, at 196.25.

To the upside, previous support at the 199.20 area (September 19, 23 lows) has turned resistance, ahead of the mentioned 200.50 /(September 29 high), and the year-to-date high, at 201.25.