|

GBP/JPY Price Forecast: Slides as risk-off surge boosts the Yen

  • GBP/JPY slides as risk aversion boosts Yen demand; equities fall on AI disruption fears.
  • Break below 50-day SMA turns bias neutral; RSI signals emerging bearish momentum.
  • Drop under 207.00 may expose deeper support at 206.80 and 205.20.

The Pound Sterling tumbles on Thursday, down 0.36% in the day as risk aversion boosted the safe-haven appeal of the Japanese Yen. Renewed AI disruption fears sent Wall Street plunging, while haven assets like Gold, Silver and the US Dollar failed to gain traction. At the time of writing, the GBP/JPY trades at 209.09 after hitting a daily high fo 209.55.

GBP/JPY Price Forecast: Technical outlook

The overall trend is up, yet after the cross breached the 50-day SMA at 210.87, it shifted to neutral-bullish with the first support level emerging at a support trendline around the 207.00-207.20 area.

Momentum shifted bearish as depicted by the Relative Strength Index (RSI). Hence further downside is seen in the short term.

If GBP/JPY tumbles below 207.00, the next support would be the 100-day SMA at 206.85 ahead of the December 16 swing low 0f 206.77. On further weakness, the next demand area would be the December 1 low at 205.20.

Conversely, if GBP/JPY rises past 208.50, the 209.00 mark emerges as the first resistance. Overhead lies the February 12 daily high at 209.55, ahead of the 210.00 milestone.

GBP/JPY Price Chart – Daily

GBP/JPY Daily Chart

Japanese Yen Price This week

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.46%-0.26%-3.05%-0.42%-1.14%-0.33%-1.00%
EUR0.46%0.20%-2.66%0.05%-0.68%0.13%-0.57%
GBP0.26%-0.20%-2.54%-0.15%-0.87%-0.07%-0.73%
JPY3.05%2.66%2.54%2.77%2.00%2.85%2.06%
CAD0.42%-0.05%0.15%-2.77%-0.62%0.10%-0.58%
AUD1.14%0.68%0.87%-2.00%0.62%0.81%0.11%
NZD0.33%-0.13%0.07%-2.85%-0.10%-0.81%-0.67%
CHF1.00%0.57%0.73%-2.06%0.58%-0.11%0.67%

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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Author

Christian Borjon Valencia

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

More from Christian Borjon Valencia
Share:

Editor's Picks

AUD/USD bounces off multi-month low, nears 0.6900

AUD/USD edges higher toward 0.6900 in the Asian session on Wednesday, recovering some of the previous day’s losses to its lowest level since March as the US Dollar stalls the hot US CPI-inspired rally amid hopes of a US-Iran peace deal. Meanwhile, hawkish comments from FOMC members have almost confirmed another December rate hike, which favors USD bulls and should cap the Aussie.

USD/JPY remains capped below 159.00 amid looming intervention risks

USD/JPY struggles to build on the previous day’s strong gains to a near one-month top as intervention risk supports the Japanese Yen while hopes of a US-Iran peace deal cap the safe-haven US Dollar. That keeps the pair's upside limited below 159.00, for now.

Gold sticks to gains near $4,050 amid steeper Fed rate hike bets

Gold clings to recovery gains near $4,050 in the European session on Wednesday. However, upside seems limited amid sustained US Dollar demand. Tuesday's hot US inflation figures fuel expectations of a more aggressive policy tightening by the US Federal Reserve (Fed). This helps the Greenback preserve recent strong gains, despite hopes for US-Iran diplomacy.

Bitcoin at risk of sharp moves as leverage builds in derivatives markets

Bitcoin remains in a capped tone, trading around $73,800 after slipping to a low of $72,727 following the previous day’s hot US inflation figures. Institutional demand continues to weaken, with BTC spot Exchange Traded Funds recording a $95 million outflow on Tuesday, marking the fourth straight day of withdrawals. Traders should be cautious as a K33 Research report highlights that BTC is at risk of sharp moves as leverage builds in derivatives markets.

Hot CPI helps cement December Fed hike as Nvidia slumps
October CPI inflation landed yesterday and beat expectations across the board. Note that we only received the MM figures because of last year’s government shutdown. Headline MM came in at 0.4%, beating the 0.3% forecast, though below September's 0.6%. Core MM also came in at 0.3%, slightly higher than the 0.2% estimate and matching the prior month’s reading.
What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.