GBP/JPY rallies to multi-week highs above 163.30s, on a weaker JPY, UK’s holiday
- boarThe GBP/JPY is registering solid gains of almost 1.80% in the week.
- An upbeat market mood increased appetite for riskier assets, and safe-haven peers fell.
- GBP/JPY Price Forecast: To test April’s 28 swings high above 164.00.
The British pound is rallying to fresh multi-week highs on Thursday, up by 1.78% and aiming towards 164.00 amidst an improved market sentiment. US equities rebound from earlier losses, and safe-haven peers are downward pressured. At 163.34, the GBP/JPY climbs sharply for the seventh straight day.
The GBP/JPY rises on a weaker JPY
The cable remains strong during the day, albeit the UK is on holiday to observe the Queen’s Jubilee. The UK’s high inflation of around 9%, about to print double digits, and slowing economic growth, would keep the GBP vulnerable to further selling pressure. Nevertheless, it got a hand from the JPY, affected by the ultra-dovish Bank of Japan’s (BoJ) monetary policy stance, despite country inflation hitting 2%.
In the Asian session, the BoJ board member Adachi said that attempting to strengthen a weaker yen by tightening monetary policy would squeeze corporate funding. Adachi commented that if the Fed’s hiking cycle cools the US economy, then there is a risk that could reverse the depreciation of the Japanese yen.
In the meantime, an absent UK economic docket left GBP/JPY traders leaning towards a pure market sentiment play. Regarding the Japanese calendar, around 12:30 GMT, Jibun Bank Services and Composite PMIs would shed some light regarding the Japanese economy.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY Thursday’s price action shows the resilience of GBP bulls, which pushed Sterling for the seventh straight session towards new daily highs. In fact, the cross-currency is trading at four-week highs whatsoever would be facing solid resistance, which is to blame for the fall from 164.25 to 155.58.
The above-mentioned would signal that the GBP/JPY is about to peak. Nevertheless, the Relative Strenght Index (RSI) at 58.90 aims higher, so a move towards April’s 28 high at 164.25 is on the cards.
Therefore, the GBP/JPY’s first resistance would be the May 5 daily high at 163.57. A breach of the latter would expose the May 2 high at 163.89, followed by 164.00 and then the above-mentioned 164.25, April’s 28 high.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
