GBP/JPY Price Analysis: Bull’s target 164.00 on a morning star pattern in the daily chart

The GBP/JPY stages a comeback but fails to reclaim 164.00 despite an upbeat market mood and a dovish Bank of Japan (BoJ), which kept rates unchanged and reiterated its accommodative stance on Thursday amidst a worldwide environment of elevated prices. At the time of writing, the GBP/JPY is trading at 163.01.

Asian equity futures have followed Wall Street’s mood, leading to a higher open. China’s coronavirus woes which tempered investors’ mood, appear to ease as Shanghai relaxed restrictions while the Russia-Ukraine conflict continues. Alongside global central bank tightening, those factors cloud an environment that could trigger a recession. On Thursday, the US Department of Commerce reported that the Q1’s GDP contracted by 1.4%.

Elsewhere, on Thursday’s session, the GBP/JPY opened near the open at around 161.00 and rallied on fundamental news that weighed on the JPY, lifting the pair towards 164.25, the daily high for a 300-pip gain. However, the GBP/JPY retreated and settled around the 163.00 mark.

GBP/JPY Price Forecast: Technical outlook

The GBP/JPY remains upward biased after plummeting 800-pips in the week, though the 160.00 thresholds put a lid on the GBP/JPY fall. On Wednesday, the GBP/JPY bounced off those lows, helped by the Relative Strength Index (RSI) shift from bearish to the bullish territory. Along with a morning star pattern (a three-candlestick formation), those factors could pave the way for further GBP/JPY gains.

The GBP/JPY’s first resistance would be the 164.00 mark. A break above would expose March’s 28 daily high at 164.65, followed by the figure at 165.00. Once cleared, GBP/JPY’s bear’s next challenge would be 166.00.

Key Technical Levels