GBP/JPY Price Forecast: Retains bullish bias near 198.00

• GBP/JPY strengthens to around 197.95 in Monday's early European session. 
• The cross maintains a constructive view above the 100-day EMA with the bullish RSI indicator.  
• The immediate resistance level is seen at 198.81; the initial support level is located at 194.34.

The GBP/JPY cross trades in positive territory for the third consecutive day near 197.95 during the early European session on Monday. The Japanese Yen (JPY) weakens against the Pound Sterling (GBP) as the Bank of Japan's (BoJ) preference to move cautiously in normalizing still-easy monetary policy forces traders to push back their bets about the likely timing of the next interest rate hike to Q1 2026. 

Technically, GBP/JPY keeps the bullish vibe on the daily chart, with the price holding above the key 100-day Exponential Moving Average (EMA). The path of least resistance is to the upside, as the 14-day Relative Strength Index (RSI) stands above the midline near 64.50. This suggests bullish momentum in the near term. 

The first upside target to watch for the cross is seen at 198.81, the high of July 25, 2024. Extended gains could see a rally to the 200 psychological level. Further north, the next hurdle is located at 203.62, the high of July 22, 2024. 

On the other hand, the initial support level for GBP/JPY emerges at 194.34, the low of June 18. A breach of this level could expose the key contention level in the 193.30-193.20 zone, representing the 100-day EMA and the lower limit of the Bollinger Band. The additional downside filter to watch is 191.90, the low of May 22. 

GBP/JPY Daily Chart