GBP/JPY technical analysis: Recovers 100 pips from session lows, bulls need break above 130.56

• GBP/JPY has risen more than 100 pips from session lows seen in early Asia.
• The outlook would turn bullish above the high of Friday’s bearish inside bar candlestick pattern.

GBP/JPY is currently trading at 129.11, having hit a low of 128.18 earlier today. The pair hit a session high of 129.23 a few minutes before press time.

The pair’s bounce from session lows could be associated with the recovery in the S&P 500 futures from 2,811.50 to 2,834.88 seen in the last hour or so.

GBP/JPY’s outlook, however, will remain bearish as long as it is held below Friday’s high of 130.56.

Bearish inside bar

The pair fell 0.73% on Friday to create a bearish inside bar candlestick pattern, which occurs when a specific period’s price action is engulfing by the preceding period’s high and low.

Friday’s bearish inside bar signaled a continuation of the sell-off from the July 25 high of 135.67 and opened the doors for a retest of the Aug. 12 low of 126.54.

Hence, a close above that candlestick’s high of 130.56 is needed to invalidate the bearish setup and confirm a bull reversal.

Daily chart

Trend: Bullish above Friday’s high

Pivot points