GBP/JPY Price Forecast: Seems poised to retest YTD peak, near 200.00 mark

• GBP/JPY regains positive traction on Thursday and seems poised to appreciate further.
• The formation of an ascending channel points to a well-established short-term uptrend.
• A convincing break below the 196.00 mark is needed to pave the way for deeper losses.

The GBP/JPY cross attracts some dip-buyers near the 198.40-198.35 region during the Asian session on Thursday and stalls a modest corrective pullback from a one-year high touched the previous day. Spot prices currently trade around the 199.00 mark and seem poised to appreciate further amid a bullish technical setup.

The recent move higher witnessed over the past two months or so has been along an upward sloping channel, which points to a well-established short-term bullish trend. Moreover, oscillators on hourly/daily charts are holding in positive territory and are still away from being in the overbought zone. This, in turn, validates the near-term positive outlook and suggests that the path of least resistance for the GBP/JPY cross is to the upside.

Hence, a subsequent strength towards retesting the year-to-date peak, just ahead of the 200.00 psychological mark, looks like a distinct possibility. The said handle coincides with the top boundary of the aforementioned trend-channel, which if cleared decisively will be seen as a fresh trigger for the GBP/JPY bulls and set the stage for an extension of the pair's three-month-old uptrend.

On the flip side, the 198.40-198.35 region, or the daily low, now seems to protect the immediate downside ahead of the 198.00 round figure. A convincing break below the latter might prompt some technical selling and expose the next relevant support near the 197.15-197.10 horizontal zone. The GBP/JPY cross could weaken towards the 196.50 intermediate support before eventually dropping to the 196.00 mark, or the lower end of the trend channel.

GBP/JPY daily chart