- The pound sterling rally continues against the Japanese yen.
- Positive UK jobs data and GDP further consolidate the BoE rate hike.
- GBP/JPY Price Forecast: Neutral bias to the upside, but downside risks remain due to solid resistance around 154.60-155.00.
The GBP/JPY extends its rally to three consecutive days, thus nullifying the double top chart pattern, as the cross-currency pair turns bullish on a positive UK jobs report amid a mixed market mood. At the time of writing, the GBP/JPY pair is trading at 154.21.
At the end of the American session, the market mood is “somewhat” positive, as shown by US stocks trading with gains. In the FX space, safe haven pairs are trading softer as the trading day progresses.
Good data from the UK and an “aggressive” BoE to lift the pound
In terms of data, the UK reported employment figures that beat expectations, which lifted the outlook for the British pound. Coupled with last Friday’s strong GDP data, those figures and the Bank of England’s (BoE) third rate hike on Thursday would support the British pound against the Japanese yen.
Overnight, GBP/JPY rallied near the 154.50 area but fell 100 pips, although it recovered on risk appetite near the 154.50 area, which is a strong resistance level, hard to break for GBP/ JPY.
GBP/JPY Price Forecast: Technical Outlook
The GBP/JPY pair is in a neutral uptrend. Longer time frame daily moving averages (DMAs) such as the 100 and 200 DMA are below the price, a sign of bullishness in the pair. Conversely, the 50 DMA is at 155.11, above spot price, and due to the last couple of candlesticks, the 154.60-155.00 area would be a solid resistance area to break through.
To the upside, GBP/JPY’s first resistance would be at the March 15 high at 154.68. A breach of the latter would expose the 155.00 mark, but watch out for a possible consolidation in the 154.60-155.00 range. However, a decisive break of the former would expose 156.00.
Additional technical levels
Source: Fx Street
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