GBP/JPY Price Analysis: Bonces off weekly lows after two days of losses firm at 156.55

• GBP/JPY snaps two days of losses as buyers eye a second test of the YTD highs above 157.00.
• GBP/JPY Technical Outlook: The cross-currency pair is upward biased, as indicated by three technical signals.

The British pound recovers from two straight days of losses amid an improved market sentiment as the North American session winds down. At the time of writing, the GBP/JPY is trading at 156.52.

GBP/JPY Price Forecast: Technical outlook

The GBP/JPY upward move on February 10 fell short of breaking above the January 5 157.76 daily high, retreating under a five-month-old downslope trendline that passes around the 157.20-40 area. At the end, that left a candlestick with a larger wick on the top, indicating that selling pressure kept the GBP/KPY of printing a higher daily close which could have exacerbated a move to the upside.

Nevertheless, the daily moving averages (DMAs) are located below the exchange rate, indicating a bullish bias in the pair. That factor, alongside a Relative Strenght Index (RSI) at 58, aiming higher and a forming “bullish harami” candle pattern, could catalyst a move to the upside.

With that scenario in play, the GBP/JPY first resistance would be 157.00. Breach of the latter would expose January 5 157.78 daily high, followed by the psychological 158.00 level and finally the October 20 158.22 daily high.