GBP/JPY Price Forecast: Bright UK data helps the Pound to extend its recovery
- GBP/JPY returns to 208.00 after bouncing from YTD lows at 206.89 earlier in the day.
- The upwardly revised UK GDP and the narrowing Current Account deficit have provided additional support to the Pound.
- In Japan, weak Retail Trade and Industrial Production data undermined confidence on the Yen.
The British Pound (GBP) is bouncing strongly against the Japanese Yen (JPY) in Wednesday’s early London session, supported by the upward revision of the UK's Gross Domestic Product (GDP) and a positive surprise in the Current Account. The GBP/JPY has regained most of the ground lost during the early Asian session, trading at 208.00 at the time of writing, after hitting a fresh year-to-date (YTD) low at 206.89.
The UK economy grew at a 0.5% pace in the second quarter, instead of the 0.4% previously estimated, according to final Gross Domestic Product (GDP) figures released earlier in the day. Likewise, the year-on-year (Y-o-Y) reading has been revised up to 1.4% from the 1.2% preliminary reading.
Beyond that, UK Current Account data released at the same time showed that the deficit narrowed unexpectedly to GBP 19.932 billion in Q2 from a downwardly revised GBP 21.12 billion in Q1, against market expectations of a widening gap of GBP 25.6 billion.
Data from Japan has failed to support the Yen on Wednesday. Retail Trade contracted 1.2% in August, after growing 2.1% in July. Industrial Production also disappointed as preliminary data showed a 4.8% decline in August, against the 1.7% growth anticipated by the market consensus and following a 0.5% increase in July,
Technical Analysis: Bulls are likely to be challenged at the 208.30 area
GBP/JPY has bounced up to 207.90, but the near-term bias remains bearish, with price action holding below a previous trendline support, which will likely act as resistance now. Momentum indicators on 4-hour charts remain within negative territory, with the Relative Strength Index (14) below 40, despite the recent rebound, and the Moving Average Convergence Divergence (MACD) slightly negative, which suggests that the recovery is still frail.
Bulls are facing a cluster of resistances in the 208.30 area, where the mentioned trendline meets the intra-day high. A confirmation above here would boost confidence for bulls and expose the September 27 and 28 highs in the 209.00 area. Further up, the September 22 and 24 highs, near 210.15 seem out of reach for the coming sessions.
On the downside, the Pound has an important support area at 207.00. Below here, the 127.2% Fibonacci retracement of September's rally, at the 206.00 area, seems like a plausible target.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.37% | -0.31% | -0.06% | 0.11% | -0.32% | -0.12% | |
| EUR | 0.10% | -0.24% | -0.21% | 0.03% | 0.20% | -0.22% | -0.02% | |
| GBP | 0.37% | 0.24% | 0.02% | 0.29% | 0.45% | 0.04% | 0.24% | |
| JPY | 0.31% | 0.21% | -0.02% | 0.24% | 0.43% | -0.02% | 0.21% | |
| CAD | 0.06% | -0.03% | -0.29% | -0.24% | 0.18% | -0.25% | -0.04% | |
| AUD | -0.11% | -0.20% | -0.45% | -0.43% | -0.18% | -0.43% | -0.21% | |
| NZD | 0.32% | 0.22% | -0.04% | 0.02% | 0.25% | 0.43% | 0.21% | |
| CHF | 0.12% | 0.02% | -0.24% | -0.21% | 0.04% | 0.21% | -0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
