GBP/JPY Price Analysis: Adds 40 pips but bear bias intact
|- GBP/JPY prints gain in Asia as the S&P 500 futures rise.
- Friday's downside break of key trendline remains valid.
GBP/JPY is currently trading at 132.55, having put in a low of 132.08 during the early Asian trading hours.
The bounce could be associated with the good news related to coronavirus vaccine and the recovery in the S&P 500 futures.
That said, bearish bias put forward by Friday's downside break of the trendline connecting March 19 and May 18 lows is still intact. At press time, the ascending trendline is located at 133.15. That level is currently housing the 10-day SMA.
A close above 133.15 is needed to invalidate bearish pressures. That, however, looks unlikely with the 14-day relative strength index (RSI) reporting bearish conditions with a below-50 print. In addition, bearish sentiment looks quite strong if we take into account Friday's red marubozu candle.
A failure to keep gains seen at press time would only validate Friday's downside break of the ascending trendline and open the doors for a slide to 130.00.
Daily chart
Trend: Bearish
Technical levels
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