GBP/JPY Price Analysis: Rallies and reclaim the 200-DMA but stalls at the 100-DMA

• The GBP/JPY advances as the Bank of England (BoE’s) third rate hike looms.
• As safe-haven peers dropped, a risk-off market mood was not an excuse for the British pound to climb.
• GBP/JPY Price Forecast: Shifts from a downward bias to a neutral though upside risks remain.

The British pound breaks above a double-top neckline around 152.94 and rallies sharply but stalled at the 100-day moving average (DMA) around 154.09, which appears to be a sudden shift in the market mood, from mixed to negative, as reflected by US equities. At press time, the GBP/JPY is trading at 153.71.

The risk-sensitive GBP rallies on positive market sentiment

Overnight, an upbeat market mood originated the rally of the GBP/JPY. Alongside market sentiment, the Bank of England (BoE) would hike rates for the third consecutive meeting, which would lift the bank’s rate from 0.50% to 0.75%, on Thursday, boosting sterling.

Analyzing the previous two-sessions price action, the GBP/JPY opened near the session’s lows and climbed steadily, reaching near the London Fix, the daily’s high at 154.18, retreating below the 154.00 mark afterward.

GBP/JPY Price Forecast: Technical outlook

The GBP/JPY shifted from a downwards to a neutral bias. Why? Failure of GBP/JPY bears to keep the spot under the neckline at 152.94 exacerbated an upward move, breaking on its way the 200 and 100-DMA, each at 153.07 and 154.03, respectively. However, if GBP/JPY bulls want to regain control, they need a daily close above the 100-DMA.

Upwards, the GBP/JPY first resistance would be the confluence of the 100-DMA and the 154.00 mark. Breach of the latter would expose the 155.00 mark, immediately followed by the 50-DMA at 155.17. Otherwise, the GBP/JPY first support would be the 200-DMA at 153.27. A sustained break would expose the double-top neckline at 1.52.94, near the 153.00 mark, followed by the 152.00 psychological level.