The GBPJPY pair, which was trading at 180.848, moved back towards the 181.00 region and lost a significant portion of its gains for the week.

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• GBP/JPY retreated towards the 181.00 area and cleared most of its weekly gains.

The pair currently trades last at 180.848.

The previous day high was 182.77 while the previous day low was 180.46. The daily 38.2% Fib levels comes at 181.34, expected to provide resistance. Similarly, the daily 61.8% fib level is at 181.89, expected to provide resistance.

On Friday, the JPY traded mixed against most of its rivals, mainly because of Governor Ueda’s from the Bank of Japan (BoJ) on widening the tolerance of the 10-year JGB. On the other hand, the GBP trades flat after the Bank of Englan monetary policy decision on Thursday.

The GBP traded mixed agains most of its rivals following Thursday’s BoE decision. Overall, rates were hiked by 25 basis points as expected. The bank no longer expects a recession but noted that the monetary policy is now “impacting ” economic activity. Regarding inflation, the BoE forecasts the Consumer Price Index (CPI) to be below 5% by year-end and below 2% by 2025. Still, the question to be asked is on whether the bank can achieve a significant drop in prices without a recession.

As for now, according to the World Interest Rates (WIRP) tool, markets are seeing 25 bps hikes in September and December, followed by an additional increase in Q1 of 2024 which would see the terminal rate at 5.75%.

On the Yen’s side, is Japanese currency seems to be gaining traction on the back of Bank of Japan (BoJ) comments which stated that the benchmark 10-year Japanese Government Bonds (JGB) will widen from 0.5% to 1.0%, which pushed Japanese yields to their highest levels since 2014. In that sense, markets may anticipate a potential pivot by the BoJ, but the Yen will remain vulnerable if the bank doesn’t take action.

Per the daily chart, the technical outlook for GBP/JPY is shifting towards neutral to bearish, with signs of bullish exhaustion becoming evident. The Relative Strength Index (RSI) displays a negative slope above its midline, while the Moving Average Convergence Divergence (MACD) exhibits fading green bars. Moreover, the pair is below the 20-day Simple Moving Average (SMA), but above the 100 and 200-day SMAs, indicating that the buyers still hold momentum on the bigger picture, dominating the sellers.

Support levels: 179.85, 179.00, 178.00.
Resistance levels: 181.25 (20-day SMA), 182.00, 183.00.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 180.88 at the time of writing. Pair opened at 181.2 and is trading with a change of -0.18 % .

The pair is trading below its 20 Daily moving average @ 181.4, above its 50 Daily moving average @ 179.78 , above its 100 Daily moving average @ 173.38 and above its 200 Daily moving average @ 168.19

The previous day high was 182.77 while the previous day low was 180.46. The daily 38.2% Fib levels comes at 181.34, expected to provide resistance. Similarly, the daily 61.8% fib level is at 181.89, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 180.18, 179.16, 177.87
• Pivot resistance is noted at 182.49, 183.78, 184.8

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