GBP/JPY Price Analysis: Bulls have a tough road to north as BoJ, UK inflation loom
- GBP/JPY picks up bids to portray three-day winning streak.
- Upbeat oscillators back further recovery but key SMA confluence, monthly resistance line challenge upside momentum.
- Bears need validation from 155.00 to retake control.
GBP/JPY bulls attack 158.00 during the three-day uptrend amid early Wednesday. In doing so, the cross-currency pair portrays the broad Yen weakness ahead of the key Bank of Japan (BoJ) monetary policy meeting decision, as well as the British Pound’s (GBP) strength before the UK Consumer Price Index (CPI) release.
It’s worth noting that the quote’s upside momentum joins the upside RSI (14), not overbought, as well as the bullish MACD signals, to suggest that the buyers have more time to keep the reins.
However, a convergence of the 50-Simple Moving Average (SMA) and the 100-SMA, around 158.80-159.00, appears a tough nut to crack for the GBP/JPY bulls.
Even if the pair rises past 159.00, a downward-sloping resistance line from early December, close to 159.40 by the press time, will precede the 160.00 round figure to probe the buyers.
Following that, a run-up towards a three-week-old resistance line near 160.65 can’t be ruled out.
Alternatively, pullback moves remain elusive unless the GBP/JPY pair stays beyond the weekly support line, around 156.90 by the press time.
Should the quote drops below 156.90, lows marked on Friday and during late December, respectively around 155.60 and 155.35, could challenge the GBP/JPY bears.
GBP/JPY: Four-hour chart
Trend: Limited upside expected