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.