GBP/JPY breaks consolidation, dips into 181.30 after BoE balks on rate hikes

The GBP/JPY skidded into the 181.00 handle after the BoE stepped back from an anticipated rate hike.
Inflation might be falling faster than previously thought in the UK, rapidly cooling rate expectations.
UK retail sales and PMI still in the pipe for Friday.

Joshua Gibson FXStreet

The GBP/JPY fell out of its recent trading range, colliding with the 181.00 major level before GBP bulls were able to catch a mild intraday relief rally to keep the Guppy trading into 181.30 heading into the end of Thursday trading.

BoE turns dovish on subsiding inflation

The United Kingdom's (UK) Consumer Price Index (CPI) figures on Tuesday came in below expectations, printing at 0.3% versus the expected 0.7%. The decline in headline inflation was enough to knock the UK's central bank back from a broadly expected rate hike as inflation appears to recede faster than previously expected.

The Bank of England (BoE) stepped back from the rate hike cycle, holding its benchmark interest rate at 5.25% versus the expected 25-basis-point hike to 5.5%.

The Bank of Japan (BoJ) is similarly expected to hold interest rates steady at -0.1% when the Japanese central bank meets on Friday.

Friday will also see Retail Sales and Purchasing Manager Index (PMI) figures for the UK. Retail Sales for August are expected to rebound from -1.2% to 0.5%, and Composite PMIs are expected to tick up slightly to 48.7 from 48.6.

The recent miss on CPI could see economic data for the UK come in below expectations, pushing the BoE further back on their rate expectations looking forward.

GBP/JPY technical outlook

The GBP/JPY fell a full percentage point after the BoE blinked on rates, taking the Guppy down into the 181.00 region. GBP bulls were able to recover the pair into 181.30, but further downside remains on the cards if buyers can't push the pair back towards the 200-hour Simple Moving Average (SMA) near 183.25.

In the meantime, a pattern of lower highs remains intact from late August's peaks near 186.70.

On the daily candlesticks, the Guppy is set to challenge the 100-day SMA currently parked near 180.00, and a rebound into bullish momentum will need to remount the 186.00 level before extending further.

GBP/JPY daily chart

GBP/JPY technical levels

GBP/JPY

Overview
Today last price	181.29
Today Daily Change	-1.83
Today Daily Change %	-1.00
Today daily open	183.12

Trends
Daily SMA20	184.06
Daily SMA50	183.26
Daily SMA100	179.83
Daily SMA200	171.08

Levels
Previous Daily High	183.35
Previous Daily Low	182.46
Previous Weekly High	184.39
Previous Weekly Low	182.52
Previous Monthly High	186.77
Previous Monthly Low	180.46
Daily Fibonacci 38.2%	182.8
Daily Fibonacci 61.8%	183.01
Daily Pivot Point S1	182.61
Daily Pivot Point S2	182.09
Daily Pivot Point S3	181.72
Daily Pivot Point R1	183.49
Daily Pivot Point R2	183.86
Daily Pivot Point R3	184.38

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

EUR/USD shifts its attention to 1.1900 and above

EUR/USD has shaken off Tuesday’s dip, pushing back beyond the 1.1800 mark amid decent gains as Wednesday’s session draws to a close. The rebound is largely driven by a modest pullback in the US Dollar, as markets digest the aftermath of President Trump’s SOTU speech and continue to monitor trade-related headlines and signals from the White House.

GBP/USD challenges multi-day highs near 1.3530

GBP/USD leaves behind the previous day’s decline and regains fresh upside traction on Wednesday, surpassing the 1.3500 barrier in a context of a modest decline in the Greenback and a generalised improved mood in the risk-linked space. Meanwhile, the US tariff narrative continues to dictate the mood among market participants after Presidet Trump’s SOTU speech failed to surprise markets.

Gold remains bid and close to $5,200

Gold buyers are returning to the fold on Wednesday, targeting the $5,200 area and possibly beyond, after Tuesday’s corrective dip from monthly highs. The rebound in the precious metal comes as the US Dollar loses traction, with Trump’s SOTU speech offering little fresh direction and AI-related nerves continuing to ease.

UK financial watchdog advances stablecoin oversight as four firms pilot issuance

The Financial Conduct Authority (FCA) in the United Kingdom (UK) is advancing toward the final stablecoin regulatory framework with a pilot program involving four companies, including Monee, Financial Technologies ReStabilise, Revolut and VVTX.

Nvidia earnings to influence AI trade and broader market sentiment

For the last three years, Nvidia has been the engine of the AI boom, and now Wall Street is watching to see whether that momentum can keep going. High-growth stocks have been struggling to maintain their bullish trend in 2026.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.