GBPJPY hits new multi-year high

The GBPJPY cross continues to trend higher and establishing above 200 mark (Monday’s close above this level was the first since Aug 2008).

Bulls cracked barrier at 200.50 (Apr 29 spike high), with sustained break here to open way for further acceleration.

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

Politics also contribute to pound’s positive stance, as Britain is focusing on July 4 general election.

Technical picture on daily chart is firmly bullish, but with growing signals of fatigue on strongly overbought conditions and diverging 14-d momentum indicator.

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

Broken 200 level reverts to initial support, followed by rising 10DMA (198.71) and 20DMA (196.45) which should contain 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