GBP/JPY Price Analysis: Range-bound, consolidates around the top of the 158.00-160.30 area
- The GBP/JPY remains positive in the week, up some 0.28%.
- Sentiment remains upbeat, as Asian stocks are poised to open higher.
- GBP/JPY Price Forecast: In the short term is downward biased and would aim towards 157.99; otherwise, expect upward pressure and a test near 161.00.
The GBP/JPY recovered some ground on Wednesday as the New York session waned and the Asian session took over, courtesy of an upbeat sentiment after the US Federal Reserve released its May monetary policy meeting minutes. At 160.16, the GBP/JPY records minimal gains of 0.08%.
A risk-on market mood keeps global equities bid. In the FX space, safe-haven peers remain on the defensive as risk-sensitive currencies rise. At the same time, Asian equity futures are poised for higher open after the Fed’s minutes message coincided with Fed official’s expressions after the May meeting.
On Wednesday, the GBP/JPY began trading near the daily lows, around 159.00. However, during the European session dipped towards the 158.50 area, reaching a new daily low. Nevertheless, the GBP/JPY encountered bids around the area and rallied above 160.00, as risk sentiment prevailed positively.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY daily chart depicts the pair neutral-downward biased. At the time of writing, the cross-currency is trading above April’s 27 159.63 swing low, aiming to extend the rally that started on May 19 and capped on May 24. A GBP/JPY daily close above 160.00 would open the door toward the May 17 daily high at 161.85.
Meanwhile, the GBP/JPY is downward biased in the short term. The 4-hour chart depicts an imbalance zone which was mitigated in the last two candles, well within the blueish painted rectangle. The upward impulse would find solid resistance at the May 25 daily high at 160.30. If the previously-mentioned level gives way, a rally towards fresh highs is on the cards.
GBP/JPY failure at 160.30 would open the door for further losses. The GBP/JPY first support would be 160.00. A breach of the latter would expose the 158.39 swing low, followed by the May 24 daily low at 157.99.
