GBP/JPY Price Analysis: Reached multi-year-highs above 164.60s later dropped to 162.60s

• The GBP/JPY reached a new YTD high above 164.00 but trimmed 200-pips gains, but finished the session in the green.
• GBP/JPY Price Forecast: An inverted hammer in the daily chart paved the way for further losses.

The GBP/JPY reached a six-year-high at 164.65, retreating afterward 200-pips on profit-taking amid a slight shift in market mood to mixed in the mid-European session. At the time of writing, the GBP/JPY is trading at 162.12.

Overnight, the GBP/JPY began the week on a higher note, jumping more than 300-pips from 161.00 towards the YTD highs, retracing later, as the North American session kicked in and market sentiment turned sour, as reflected by US equities.

GBP/JPY Price Forecast: Technical outlook

Monday’s price action of the GBP/JPY formed an inverted hammer, a bearish candlestick, with a 230-pip large wick on top of the real body, suggesting that the cross-currency might correct further lower before resuming upwards.

That said, the GBP/JPY first support to test would be 162.00. A decisive break could pave the way for further losses. The following support would be March 28 daily low at 160.76, followed by March 25 daily low at 159.85.

Upwards, the GBP/JPY first resistance would be 163.00. Once cleared, there’s nothing in the way of another test of the YTD high around 164.65, only the 164.00 mark.

Technical levels to watch