Rebounds swiftly from multi-day lows, remains vulnerable

GBP/JPY extended the previous day’s rejection slide from the 137.00 round-figure.
A convincing break below the 135.80-75 confluence support favours bearish traders.
Only a sustained move beyond the 136.00 mark will negate the negative outlook.

The GBP/JPY cross witnessed some heavy selling on the last trading day of the week and extended the previous day’s rejection slide from the 137.00 mark, or three-week tops. The mentioned level represented the top end of a 1-1/2-week-old ascending trend-channel.

A subsequent fall to multi-day lows, around the key 135.00 psychological mark, confirmed a near-term bearish break through confluence support – comprising of the trend-channel support and 100-hour SMA. This, in turn, might have already set the stage for additional weakness.

Meanwhile, technical indicators on the daily chart maintained their bearish bias and have again drifted back into the negative territory, adding credence to the bearish outlook. Hence, a slide back towards weekly lows, around the 134.35 region, now looks a distinct possibility.

On the flip side, the confluence support breakpoint, around the 135.75-80 region, now seems to act as immediate strong resistance. Some follow-through strength back above the 136.00 mark might negate the bearish bias and push the cross back towards reclaiming the 137.00 mark.