GBP/JPY Price Analysis: Flirting with four-month ascending trendline

• Risk-off pushes GBP/JPY down to key trendline support. 
• Acceptance lower will likely yield a sell-off to support at 131.95.

GBP/JPY is trading at a session low of 134.45 at press time, representing a 0.18% drop on the day. 

The pair is flirting with the support of trendline rising from March 19 and May 18 lows. A close below that support would imply an end of the rally from the March 19 low of 123.99. 

That said, the previous two instances of the downside break of the rising trendline seen on June 19 and June 26 had trapped sellers on the wrong side of the market. 

This time, however, the downside break of the trendline could prove costly, as the relative strength index on the hourly and 4-hour charts is reporting bearish conditions with a below-50 print, Back in June, the key indicator was signaling oversold conditions with a below-30 print. 

Acceptance below the trendline would shift the focus to 131.95 (June 29 low). On the higher side, the July 9 high of 135.92 is the level to beat for the bulls. 

Daily chart

Trend: Bearish

Technical levels