GBP/JPY consolidates its recent gains to YTD peak, holds steady below mid-166.00s

• GBP/JPY edges higher for the sixth straight day, albeit lacks follow-through buying.
• The mixed UK macro data is holding back the GBP bulls from placing aggressive bets.
• Looming recession risks benefit the JPY and contribute to capping gains for the cross.

The GBP/JPY cross trades with a mild positive bias for the sixth successive day on Thursday and is currently placed around the 166.25-166.30 region, just a few pips below the YTD peak touched the previous day.

The underlying bearish sentiment surrounding the US Dollar (USD) benefits the British Pound, which, in turn, is seen acting as a tailwind for the GBP/JPY cross. That said, a combination of factors is holding back traders from placing fresh bullish bets and keeping a lid on any meaningful upside for the cross, at least for the time being.

The softer UK macro releases come on the back of the recent mixed signals from the Bank of England (BoE) policymakers over future rate hikes and act as a headwind for the Sterling Pound. In fact, the UK Office for National Statistics reported that the economic growth remained flat in February as compared to the 0.1% rise estimated.

Adding to this, the UK Manufacturing and Industrial Production figures missed market expectations, which overshadows the better-than-expected Trade Balance data. This, along with looming recession fears, drives some haven flows towards the Japanese Yen (JPY) and further contributes to capping gains for the GBP/JPY cross.

Hence, it will be prudent to wait for strong follow-through buying before traders start positioning for any further near-term appreciating move for the GBP/JPY cross. The recent bounce from a technically significant 200-day Simple Moving Average (SMA), however, favours bulls and supports prospects for additional near-term gains.

Technical levels to watch