GBP/JPY Price Analysis: Struggles at 161.50, despite bull’s effort aiming towards 162.00

 The British pound extends its gains against the low-yielder Japanese yen for four days, courtesy of a positive market sentiment that witnessed flows towards the equity markets. At the time of writing, the GBP/JPY is trading at 161.46, up by some 0.63%.

Asian and European stocks recorded gains, while US equities rose. Safe-haven peers remain downward pressured, particularly the Japanese yen and the greenback, a tailwind for the GBP/JPY. Meanwhile, at the Euro area summit, the EU Commission failed to deliver the sixth tranche of sanctions to Russia on disagreements regarding the Russian oil embargo.

Elsewhere, it is worth noticing that the week began in a positive mood due to China’s Covid-19 improvements. A Beijing city official said they would no longer require working from home, while Shanghai is set to remove restrictions on Wednesday, June 1.

GBP/JPY Price Analysis: Technical outlook

GBP/JPY Monday’s price action lifted the pair towards the May 17 high at 161.85 but failed to conquer that level. However, it’s worth noting that the Relative Strength Index (RSI,) albeit in the bullish territory, is directionless, and if the cross-currency pair is aiming for a break above May 9, swing high at 162.18, it would need to overcome some hurdles on its way north.

With that said, the GBP/JPY’s first resistance is the 161.50 mark. Break above would expose the May 17high at 161.85, followed by 162.00, and then the May 9 swing high at 162.18.

Otherwise, the GBP/JPY’s failure at 161.50 would open the door for further downside action. The GBP/JPY first support would be the 161.00 mark. A breach of the latter would expose the May 30 low at 160.25, followed by May 20 low at 158.72.

Key Technical Levels