GBP/JPY Price Analysis: Bulls give up, and bears retake the 20-day SMA

GBP/JPY retreated towards the 181.00 area and cleared most of its weekly gains.
Investors continue to digest BoE’s decision on Thursday.
Governor Ueda committed that the BoJ will be more flexible with the 10-year JGB.

Patricio Martín FXStreet

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.

GBP/JPY Levels to watch

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 negative red 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.

GBP/JPY Daily chart

GBP/JPY

Overview
Today last price	180.88
Today Daily Change	-0.32
Today Daily Change %	-0.18
Today daily open	181.2

Trends
Daily SMA20	181.4
Daily SMA50	179.78
Daily SMA100	173.38
Daily SMA200	168.19

Levels
Previous Daily High	182.77
Previous Daily Low	180.46
Previous Weekly High	182.35
Previous Weekly Low	176.32
Previous Monthly High	184.02
Previous Monthly Low	176.32
Daily Fibonacci 38.2%	181.34
Daily Fibonacci 61.8%	181.89
Daily Pivot Point S1	180.18
Daily Pivot Point S2	179.16
Daily Pivot Point S3	177.87
Daily Pivot Point R1	182.49
Daily Pivot Point R2	183.78
Daily Pivot Point R3	184.8

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

EUR/USD seems fragile below 1.1700 as Middle East war boosts energy prices

The EUR/USD pair trades flat at around 1.1680 during the Asian trading session on Tuesday, but broadly seems vulnerable, being close to its five-week low. The major currency pair is under pressure as surging oil prices due to the United States-Israel war with Iran have increased the risks of higher inflation for the Old Continent.

GBP/USD hovers around 1.3400 with bearish pressure intact

GBP/USD edges higher after three days of losses, trading around 1.3400 during the Asian hours on Tuesday. The technical analysis of the daily chart indicates an ongoing bearish bias, as the pair trades within a descending channel pattern.

Gold sticks to gains above $5,350 amid sustained safe-haven demand; firmer USD caps gains

Gold sticks to its positive bias for the third straight day and trades above the $5,350 level heading into the European session on Tuesday. Concerns about a broader regional conflict in the Middle East continue to weigh on investors' sentiment and underpin demand for the traditional safe-haven bullion.

Stellar risks deeper losses as derivatives metrics turn negative

Stellar is trading red below $0.16 at the time of writing on Tuesday, after a slight recovery the previous day. Weakening derivatives data caps the recovery, while an unfavorable technical outlook projects a deeper correction for the XLM token in the upcoming days.

The market is not panicking it is repricing the probability distribution of Oil and time

At the end of the day, markets do not trade morality or geopolitics. They trade transmission channels. And the only channel that truly matters in this maelstrom runs through the price of energy and the time value of money.

Hyperliquid Price Forecast: HYPE rises on commodities demand amid US-Iran war

Hyperliquid (HYPE) steadies above $33 at press time on Tuesday, marking its fourth consecutive day of recovery in a broadly volatile market due to the ongoing US-Israel strikes on Iran.