GBP/JPY Price Forecast: Bulls are testing resistance at 200.30 area

• Pound bulls have encountered resistance above the 200.00 level in their rally against the Yen.
• The JPY remains on its back foot with traders awaiting Tokyo CPI data.
• GBP/JPY is attempting to overcome a reverse trendline at 200.30.

The British Pound is trading higher against the Japanese Yen for the fourth consecutive day. The pair bounced up from the 199.20 area last week and has returned above the 200.00 level; however, a broken trendline resistance in the vicinity of 200.30 is currently holding bulls back for now.

The pound has been drawing support from a broad-based Yen weakness this week. The minutes of the latest BoJ meeting have failed to provide any significant support to the Yen, as investors await Tokyo CPI data, due later today, with the market split about the chances of a rate hike in October.

GBP/JPY 4-Hour Chart

The technical picture is positive. Indicators on t-hour chats show a strong bullish momentum, but the pair would need to return above the bottom of the broken channel, at 200.30, to extend its recovery towards the September 19 high, at 200.50, and the year-to-date high, at 201.27

To the downside, the intra-day low, near 199.90, is likely to challenge a potential bearish reaction. Below here, the 199.20 area, which contained downside attempts on September 18 and 23, will come into focus. Further down, the 78.6% retracement of the September rally meets the September 5 low at 168.65.

encountered resistance above the 200.00 level in