GBP/JPY remains near 2017 highs with a bullish tone

• Technicals continue to point to the upside but limited by 153.00.
• On a quiet week, spot remains sideways around 151.50. 

The GBP/JPY pair is about to end the year with a 5.25% gain that represents a modest recovery after the sharp slide that took place during 2016 when the yen rallied and the pound tumbled after the Brexit referendum. 

Bullish but limited 

GBP/JPY is hovering around 151.80, unchanged for the day and also for the month. Still trades near the 2017 top. During the last week, price found support at the 20-day moving average at 151.25. A close below could favor a bearish correction exposing December lows at 149.30. 

The upside faces immediate resistance at 152.00. Above that level, the pound could gain momentum for a test of 2017 highs at 153.40. A consolidation significantly above 153.00 could open the doors to more gains over the medium term. 

Risks for next year 

The demand for the yen continues to be favored amid risk aversion and falling yields. Geopolitical factors could strengthen the yen while on the other side, central banks reducing momentary stimulus could boost yields weakening the Japanese currency. 

The pound will face two main risks during 2018: Brexit negotiations and UK politics.     Day-to-day politics and Brexit talks could be the main driver. The economy kept growing despite uncertainties while inflation picked up during the second half of the year.