• The Pound treads water below 203.00, and keeps the immediate bearish trend intact
• The Yen remains vulnerable as Sanae Takaichi secured support to become Japan's next Prime Minister.
• Concerns about the UK's fiscal policy are undermining demand for the Pound.

The British Pound has been on an extended correction since peaking at the 206.30 area in early October. Price action is moving within a downward channel, with the larger wicks in the daily chart showing a hesitant market. The pair was capped at 203.00 earlier on Monday and is testing support at the 202.00 area at the time of writing.

News that the fiscal dove Sanae Takaichi secured the necessary support to become prime minister has hurt the Yen earlier today, but the Pound seems unable to capitalize on JPY’s weakness and is trading practically flat on the day, undermined by investors’ concerns about the UK’s fiscal policy.

Technical analysis: Below 202.00, the target is the channel bottom, at 200.95

A look at the 4-hour chart confirms a hesitant market with a moderate bearish bias. The Relative Strength Index (RSI)keeps wavering back and forth around the 50 level, and the succession of lower peaks and lower troughs seen over the last two weeks suggests that bears keep the upper hand.

The pair was capped at the channel top.,near 203.10, and is giving away gains on the early European session, approaching the intra-day low at 202.00. Further down the bottom of the channel, at the 200.90 area, appears as a likely target.

On the upside, the pair should breach the mentioned channel top, right above 203.0,0 and the October 14 high, atthe 203.50 area to cancel the bearish pattern. A confirmation above those levels would clear the way towards the 204.40-204.50 area (October 8 lows) and the YTD high, at 205.30.