GBP/JPY Price Forecast: Keeps bullish vibe, first upside target emerges near 198.50

• GBP/JPY weakens to around 197.85 in Thursday's early European session, down 0.23% on the day.
• The positive view of the cross prevails above the key 100-day EMA with the bullish RSI indicator. 
• The first upside barrier emerges at 198.45; the initial support level to watch is 196.17.

The GBP/JPY cross attracts some sellers to near 197.85 during the early European session on Thursday. The Pound Sterling (GBP) softens against the Japanese Yen (JPY) amid the dovish remarks from the Bank of England (BoE). BoE Governor Andrew Bailey said on Tuesday there were now signs that the UK labor market was softening, and he emphasized his view that interest rates are likely to continue falling.

Technically, the constructive outlook of GBP/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the 14-day Relative Strength Index (RSI), which stands above the midline near 62.60, displaying bullish momentum in the near term.

The upper boundary of the Bollinger Band at 198.45 acts as an immediate resistance level for GBP/JPY. Extended gains could see a rally to the 198.95-199.00 zone, representing the high of December 20, 2024, and the psychological level. The additional upside filter to watch is 199.81, the high of October 30, 2024. 

On the flip side, the initial support level for the cross is located at 196.17, the low of June 23. Sustained trading below the mentioned level could see a drop to 194.34, the low of June 18. The next downside target to watch is 193.50, the 100-day EMA, followed by 193.00, the lower limit of the Bollinger Band.

GBP/JPY daily chart