The GBPJPY pair reached a level of 181.793, increasing to approximately 181.80, indicating a gain of 0.80% throughout the day. There is a decrease in bearish sentiment as they are starting to retreat.

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• The GBP/JPY rose towards 181.80, showing 0.80% gains on the day as bears are giving up.

The pair currently trades last at 181.793.

The previous day high was 182.35 while the previous day low was 180.76. The daily 38.2% Fib levels comes at 181.37, expected to provide support. Similarly, the daily 61.8% fib level is at 181.74, expected to provide support.

On Tuesday, the GBP gained ground against the JPY, mainly because of rising British yields, which helped the pound trade with gains against most of its rivals. On the other hand, the JPY traded mixed against most of its rivals while markets eagerly await the Bank of Japan (BoJ) decision on Friday.

Ahead of next week’s Bank of England (BoE) decision, markets are not so confident that the bank will deliver a 50 basis point (bps) hike but discount 25 bps hikes in September, November and February, which would see the terminal rate at 5.75%. It’s worth noticing that lower inflation figures reported from June and the fears of the UK slipping into a recession are making investors bet on a dovish BoE. However, Core inflation remains high, so the bank will likely attach to their hawkish policy making investors worry about how it could further weaken the economy.

On the Japanese side, the Bank of Japan (BoJ) will meet on Friday and deliver fresh economic projections. As for now, markets expect the bank to stick to its dovish stance, so monetary policy divergence could further weaken the JPY. In addition, the updated protections will be key as they will help investors to model their expectations regarding the bank’s next steps. On the positive side for the Yen, the Chinese government announced that they would deliver an economic stimulus to the local economy to bolster local demand, which would benefit the Japanese economy and the JPY.

The daily chart shows a neutral to bullish outlook for the short term. On the positive side, the Relative Strength Index (RSI) is in positive territory, with a slightly positive slope, while the Moving Average Convergence Divergence (MACD) indicator prints mild fading red bars, indicating a fading bearish momentum. On the flip side, the buyers lost the 20-day Simple Moving Average (SMA), so as long as they don’t retake it, the upside potential is capped.

Resistance levels: 182.05 (20-day SMA),182.50,183.50.
Support levels: 181.00, 181.50,180.00.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 181.79 at the time of writing. Pair opened at 181.48 and is trading with a change of 0.17 % .

The pair is trading below its 20 Daily moving average @ 182.12, above its 50 Daily moving average @ 178.25 , above its 100 Daily moving average @ 171.83 and above its 200 Daily moving average @ 167.68

The previous day high was 182.35 while the previous day low was 180.76. The daily 38.2% Fib levels comes at 181.37, expected to provide support. Similarly, the daily 61.8% fib level is at 181.74, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 180.71, 179.94, 179.12
• Pivot resistance is noted at 182.3, 183.12, 183.88

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