GBP/JPY Price Analysis: Soars to six-year highs but retraces toward the 169.00 figure

GBP/JPY climbs sharply by more than 250 pips on Monday due to fundamental reasons.
Negative divergence in the GBP/JPY one-hour chart opens the door for a mean reversion move.

Christian Borjon Valencia FXStreet

The GBP/JPY rallies to fresh six-year highs at 170.10 due to investors’ relief on the UK’s newest Finance Minister, Jeremy Hunt, ditching Kwarteng’s mini-budget as he tries to ease the markets. Therefore, the British pound soared against most G8 currencies, particularly the yen, gaining 290 pips. At the time of writing, the GBP/JPY is trading at 169.18.

GBP/JPY Price Forecast

On Monday, the GBP/JPY surged, extending its gains towards the 170.00 figure, but profit-taking around the area weighed on the pair, retracing toward the 169.00 figure. Worth noting that the GBP/JPY is trading above the previous 2022 high, reached on June 9 at 168.04, so a daily close above it could open the door for consolidation around 169.00-170.00.

Short term, the GBP/JPY one-hour scale price action registered a series of higher highs/lows, emphasizing the upward bias. Of note, the Relative Strength Index (RSI) printed successive series of lower peaks, forming a negative divergence, opening the door for a mean-reversion move.

Therefore, the GBP/JPY first support would be the R2 daily pivot at 168.34. The break below will expose the R1 pivot at 167.28, followed by the 50-EMA at 167.17.

GBP/JPY Key Technical Levels

GBP/JPY

Overview
Today last price	169.02
Today Daily Change	2.97
Today Daily Change %	1.79
Today daily open	166.05

Trends
Daily SMA20	161.39
Daily SMA50	162.34
Daily SMA100	163.29
Daily SMA200	160.83

Levels
Previous Daily High	167.22
Previous Daily Low	165.03
Previous Weekly High	167.29
Previous Weekly Low	159.73
Previous Monthly High	167.22
Previous Monthly Low	148.8
Daily Fibonacci 38.2%	165.87
Daily Fibonacci 61.8%	166.39
Daily Pivot Point S1	164.98
Daily Pivot Point S2	163.9
Daily Pivot Point S3	162.78
Daily Pivot Point R1	167.18
Daily Pivot Point R2	168.3
Daily Pivot Point R3	169.37

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.