GBP/JPY moves away from monthly top set on Friday, manages to hold above 188.00 mark

GBP/JPY fails to capitalize on its modest intraday gains to levels just above mid-188.00s.
Expectations for an imminent BoJ policy pivot underpin the JPY and exert some pressure.
Bets that the BoE will soon begin cutting interest rates further weigh on the British Pound.

Haresh Menghani FXStreet

The GBP/JPY cross attracts some intraday sellers following an uptick to the 188.65 area and drops to a fresh daily low during the first half of the European session on Monday. Spot prices currently trade around the 188.25-188.20 region and look to extend Friday's late pullback from the vicinity of the 189.00 round figure, or the YTD peak.

Investors seem convinced that the Bank of Japan (BoJ) will eventually pivot away from its ultra-loose monetary policy settings after the outcome of annual wage negotiations in March. This, to a larger extent, helps offset BoJ Deputy Governor Shinichi Uchida's dovish remarks on Thursday, saying that aggressive tightening is unlikely even after an exit from the negative interest rate policy and underpins the Japanese Yen (JPY). The British Pound (GBP), on the other hand, meets with some supply in the wake of reviving US Dollar (USD) demand, which, in turn, is seen as another factor exerting downward pressure on the GBP/JPY cross.

The GBP is further weighed down by growing acceptance that the Bank of England (BoE) could lower borrowing costs in the next few months. In fact, the current market pricing suggests that the UK central bank could deliver four 25 basis points (bps) interest rate cuts by the end of the year. This, in turn, suggests that the path of least resistance for the GBP/JPY cross is to the downside and supports prospects for deeper losses. Bearish traders, however, might wait for this week's key UK macro releases – starting with the jobs report on Tuesday, followed by consumer inflation figures and the prelim Q4 GDP print, on Wednesday and Thursday, respectively.

Investors will further take cues from BoE Governor Andrew Bailey's scheduled speech on Wednesday for some meaningful impetus. Hence, it will be prudent to wait for strong follow-through selling before confirming that the GBP/JPY cross has topped out in the near term and positioning for further losses.

Technical levels to watch

GBP/JPY

Overview
Today last price	188.22
Today Daily Change	-0.33
Today Daily Change %	-0.18
Today daily open	188.55

Trends
Daily SMA20	187.39
Daily SMA50	184.33
Daily SMA100	184.15
Daily SMA200	182.11

Levels
Previous Daily High	188.87
Previous Daily Low	188.24
Previous Weekly High	188.87
Previous Weekly Low	186.18
Previous Monthly High	188.94
Previous Monthly Low	178.74
Daily Fibonacci 38.2%	188.63
Daily Fibonacci 61.8%	188.48
Daily Pivot Point S1	188.24
Daily Pivot Point S2	187.92
Daily Pivot Point S3	187.61
Daily Pivot Point R1	188.87
Daily Pivot Point R2	189.18
Daily Pivot Point R3	189.5

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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