GBP/JPY Price Forecast: Clings to gains above 208.00; bearish bias intact ahead of BoE/BoJ

GBP/JPY kicks off the new week on a positive note, though it remains confined in a familiar range.
Traders seem hesitant to place fresh directional bets ahead of BoE and BoJ meetings this week.
The bearish technical setup suggests that the path of least resistance remains to the downside.

Haresh Menghani FXStreet

The GBP/JPY cross attracts some buyers at the start of a new week and maintains its bid tone around the 208.25-208.30 region through the first half of the European session. Spot prices, however, remain within striking distance of the year-to-date low, touched last Tuesday, as traders await this week's key central bank events before placing fresh directional bets.

The Bank of England (BoE) is scheduled to announce its decision on Wednesday, followed by the outcome of a two-day Bank of Japan (BoJ) meeting on Friday. The UK central bank is expected to leave interest rates unchanged, while traders seem to have fully priced in a 25 basis points (bps) BoJ rate hike. Hence, the focus will be on the future policy path, which, in turn, will play a key role in providing some meaningful impetus to the GBP/JPY.

Spot prices maintain a negative tone below the 200-day Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level of the April 2025-July 2026 rally. Moreover, the range-bound price action witnessed over the past week or so might still be categorized as a bearish consolidation phase against the backdrop of the recent decline. This backs the case for an extension of the well-established downfall witnessed since the beginning of this month.

Meanwhile, the Moving Average Convergence Divergence (MACD) stays negative, and the Relative Strength Index (RSI) holds near 30, hinting at persistent downside pressure despite an emerging oversold condition. Hence, any further recovery is more likely to confront resistance near the 23.6% retracement at 211.38, which, if cleared, would be the first sign of easing bearish pressure. However, only a sustained move through the 200-day SMA at 213.11 would start to undermine the current downbeat bias, with further resistance then seen toward the cycle high zone at 219.69.

On the downside, immediate support is aligned at the 38.2% Fibo. retracement near 206.24, ahead of the 50% retracement at 202.08, where sellers could pause. A deeper slide would expose the 61.8% retracement at 197.93 and the 78.6% level at 192.01, before the broader swing low anchor around 184.47.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

GBP/JPY daily chart

BoE FAQs

What does the Bank of England do and how does it impact the Pound?

The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).

How does the Bank of England’s monetary policy influence Sterling?

When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.

What is Quantitative Easing (QE) and how does it affect the Pound?

In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.

What is Quantitative tightening (QT) and how does it affect the Pound Sterling?

Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.

Author

Haresh Menghani

FXStreet

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

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.

USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold remains sidelined just above $4,000

Gold leaves behind the recent three-day positive streak and faces renewed selling pressure near the $4,000 mark per troy ounce on Thursday. The precious metal’s daily decline comes amid marginal gains in the US Dollar and mixed US Treasury yields, while crude oil prices remain on the back foot.

Top Altcoins Price Forecast: Ripple and Solana under pressure as Hyperliquid recovers

Ripple is down over 2% on Thursday, extending losses below $1.30 and capped below crucial moving averages. Solana drops 2% so far, testing its 200-day EMA and the $100 psychological level amid mounting selling pressure.

BoJ preview: Hawkish hold

Having hiked rates by 25bp to 1.25% in September, the central messages from the BoJ were largely similar; upside price risks remained, real interest rates were still negative and further policy rate hikes should be expected.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.