GBP/JPY Price Analysis: Surges 150 pips and records a fresh 7-year high at 168.53

• The GBP/JPY is registering weekly gains of almost 3%.
• Japanese yen weakness sounds the alarm of a possible intervention in the FX market.
• GBP/JPY traders need to know how the USD/JPY behaves around 135.00.
• GBP/JPY Price Forecast: Remains upward biased, and a break above 169.00 would open the door for 170.00; otherwise, a pullback towards 164.00s is on the cards.

The GBP/JPY soars to fresh six-year highs, despite a risk-off market mood, courtesy of the Bank of Japan’s (BoJ) pledging to keep its ultra-loose monetary policy posture, which also maintains the USD/JPY under pressure, reaching fresh 20-year highs. At the time of writing, the GBP/JPY is trading at 168.24, up almost 1%.

The Japanese yen would be under heavy pressure on Thursday. The USD/JPY is approaching the 135.00 mark, a price level mentioned by former Japanese officials as a line of the sand that could trigger an intervention by the Japanese Ministry of Finance in the Forex market.

Hiroshi Watanabe, a former currency chief in the Ministry of Finance until 2007, said that “Even 130, 135 is not so critically bad for the Japanese economy,” via Bloomberg. However, Watanabe added, “how long it’s going to stay there is quite important.”

In the meantime, Asian equity futures are mixed, carrying on Wall Street’s sentiment, with US stocks recording hefty losses.

Meanwhile, GBP/JPY Wednesday’s price action opened around 166.80s, and rallied steadily towards 168.50s, recording minor pullbacks on its way up,

GBP/JPY Price Forecast: Technical outlook

The GBP/JPY had skyrocketed since May 25^, when the cross soared 0.72%, beginning its 1024 pip rally towards printing a 7-year high above 168.50. It’s worth noting that the pair’s bias remains upward, but due to the steepness move of the cross and the Relative Strength Index (RSI) in overbought territory, it might pave the way for a pullback.

If the GBP/JPY heads for a pullback, the cross-currency first support would be June 8 daily low at 166.82. A breach of the latter would expose the 23.6% Fibonacci retracement at 165.49, followed by the 38.2% Fibonacci retracement at 163.62. On the other hand, if the GBP/JPY aims higher, the first resistance would be the 169.00 figure. A break above would expose February’s 2016 swing highs around 170.63. Once cleared, a GBP/JPYrally towards 175.01 is on the cards.

Key Technical Levels