GBP/JPY Price Analysis: Rallies more than 200 pips on Tuesday, above 164.50 despite a risk-off mood

• GBP/JPY bounced from daily lows below 162.00, advancing sharply and reaching the 165.00 figure.
• The daily chart portrays the GBP/JPY as upward biased.
• Short term, the GB/JPY might retest the YTD highs; otherwise, a fall towards 163.00 is on the cards.

The GBP/JPY breaks above the 162.83 top of a 20-day trading range, rallying sharply more than 250 pips on Tuesday, courtesy of broad Japanese yen weakness across the board, despite a risk-off impulse in the financial markets.

On Tuesday, the GBP/JPY opened near the 20-day EMA, below it at around 161.88, and never looked back, soaring sharply, registering a six-weekly high at around 165.09, in the middle of the New York session. As the Asian Pacific session begins, the GBP/JPY is trading at 164.56, slightly below the opening price.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY daily chart illustrates the pair breaking above 162.83, top of the 160.80-162.83 range, opening the door for further gains. Worth noting that the Relative Strength Index (RSI) crossed above the 50-midline to the bullish territory. Therefore, the GBP/JPY could test the 166.00 figure in the near term.

Meanwhile, the GBP/JPY one-hour chart depicts the cross-currency pair retracing from daily highs nearby 165.00, eyeing a fall towards the 20-EMA at 164.15. If the GBP/JPY drops below the latter, it will exacerbate a move towards the daily pivot point at 163.80, followed by the 163.00 figure. Otherwise, if the GBP/JPY holds the fort above 164.00, its first resistance would be the 165.00 mark. Once cleared, the next resistance would be the R1 daily pivot at 165.77, followed by the psychological 166.00 price level.

GBP/JPY Key Technical Levels