• GBP/JPY extends its weekly rally for three consecutive days, up 0.90%.
• Positive UK economic data, alongside a break above Tuesday’s Asian high, exacerbated a test of the 166.00 figure.
• GBP/JPY Price Analysis: Approaches a break above a two-month-old downslope trendline; otherwise would fall towards the 20-day EMA around 164.40s.

The GBP/JPY rises for six straight days as Wednesday’s Asian Pacific session begins, with the GBP/JPY barely up by 0.06%, courtesy of positive UK economic data, to the detriment of the Japanese yen, pressured by an upbeat market mood, and higher US Treasury yields. At the time of writing, the GBP/JPY is trading at 165.80.

GBP/JPY Price Analysis: Technical outlook

GBP/JPY Tuesday’s price action depicts the pair opening near the daily pivot point at 165.00, followed by a fall below the 20-hour EMA, on the way to the daily low at 164.71, capping the fall just above the 50-hour EMA. Then, the GBP/JPY bounced off and rallied above 165.00, back above the 20-day EMA, and on its way up, hit a daily high at around 166.00 before easing towards current levels.

GBP/JPY Daily chart

The GBP/JPY depicts the pair as upward biased, with the daily moving averages (DMAs) below the exchange rate and about to break a two-month-old downslope trendline, above the 166.00 mark. Additionally, the GBP/JPY’s RSI at 58.29 suggests further upside, but its slope begins to shift almost horizontally, meaning buying pressure tempering ahead of the previously-mentioned trendline.

Using the above mentioned as a base case scenario, the GBP/JPY first resistance would be 166.00. A breach of the latter will expose June’s 28 high at 166.94. once cleared, the cross-currency will aim towards June’s 22 swing high at 167.85.

On the other hand, if GBP/JPY sellers step in, the first support would be the figure at 165.00. A decisive break will send the pair towards the 20-day EMA at 164.38, followed by the 50-day EMA at 163.25.

GBP/JPY Key Technical Levels