GBP/JPY Price Forecast: Gains momentum to near 197.50, bullish outlook remains intact

• GBP/JPY strengthens to around 197.50 in Wednesday’s early European session, adding 0.16% on the day. 
• The constructive outlook of the cross remains intact above the key 100-day EMA, with the bullish RSI indicator. 
• The immediate resistance level emerges in the 198.90-199.00 zone; the first support level to watch is 196.28.

The GBP/JPY cross gathers strength to near 197.50 during the early European session on Wednesday. The Japanese Yen (JPY) softens against the Pound Sterling (GBP) as US President Donald Trump raises doubts over a US-Japan deal. Additionally, Trump said that he could impose a tariff of 30% or 35% on imports from Japan, above the tariff rate of 24% announced on April 2. 

Technically, the constructive outlook of GBP/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline near 58.00, suggesting that further upside looks favorable. 

On the bright side, the first upside barrier for the cross emerges at the 198.90-199.00 region, portraying the upper boundary of the Bollinger Band and psychological level. A decisive break above this level could pick up more momentum and aim for the crucial resistance level at the 200.00 round mark. Further north, the additional upside filter to watch is 200.75, the high of May 28, 2024.

In the bearish case, the initial support level for the GBP/JPY is seen at 196.28, the low of July 1. A breach of this level could drag the cross toward 194.18, the lower limit of the Bollinger Band. The next contention level is located at 193.85, the 100-day EMA.