GBP/JPY Price Analysis: The rally continues firmly towards 156.00

• On Thursday, the GBP/JPY advances some 0.53%, as the American session ends.
• The GBP/JPY began its 500-pip rally on December 21 on positive Covid-19 developments in South Africa.
• GBP/JPY has an upward bias, though a break above 155.50 would accelerate the rally towards 156.00.

As the Asian session kicks in, the British pound extends its weekly rally against the Japanese yen, trading at 155.06 at the time of writing. The ongoing GBP/JPY rally paused on Tuesday, allowing late buyers to jump on, closing near the 154.20 area.

That said, the GBP/JPY year-end rally began on December 21, when the pair jumped from 149.80s to 151.40s, as Omicron woes started to wane, once South Africa reported that although the Covid-19 strain was highly transmissible, it caused less severe symptoms. When the news was known, investors’ mood improved, and risk-sensitive currencies like the GBP advanced to the detriment of safe-haven peers.

Once that happened, the GBP/JPY rallied 500-pips and still has some room to go, at least until the May 28 swing high at 156.07.

The cross-currency pair has an upward bias, as portrayed by the daily moving averages (DMAs) residing well below the spot price.

The GBP/JPY Wednesday’s upward move was capped around the June 23 daily high at  155.15, which would be the first resistance on the way up at press time. A break above that level would expose June 15 swing high at 155.48, followed by the May 28 swing high at 156.07.

Contrarily, on the way down, the GBP/JPY first line of defense would be 155.00. A breach of the latter would expose the December 29 daily low at 154.05, followed by the December 23 daily high resistance-turned-support at 153.71, and then the 50-DMA at 152.95.

GBP/JPY Daily chart