GBP/JPY reaches a new multi-year peak

The GBP/JPY pair continues to trend higher, solidifying its position above the 200 mark (Monday’s close above this level was the first since August 2008).

Bulls have breached the barrier at 200.50 (April 29 spike high), with a sustained break here paving the way for further acceleration.

Sterling remains supported by the significant divergence between the interest rates of the BoE and BoJ, as well as diminishing hopes for a June rate cut after the latest data showed a fresh rise in UK consumer prices.

Political factors also contribute to the pound’s positive stance, as Britain focuses on the July 4 general election.

The technical picture on the daily chart is firmly bullish, though there are growing signs of fatigue due to strongly overbought conditions and a diverging 14-day momentum indicator.

Although the price is still in an unobstructed uptrend, some corrective action should be anticipated in the coming sessions.

The broken 200 level reverts to initial support, followed by the rising 10DMA (198.71) and 20DMA (196.45), which should contain the pullback for a healthy correction before larger bulls regain traction.

Res: 201.00; 202.66; 204.00; 206.15
Sup: 200.00; 198.71; 197.42; 196.45