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.

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