|

GBP/JPY Price Forecast: Slumps as Yen gains on risk aversion

  • GBP/JPY dips 0.20% to 211.82 as traders await Bank of Japan decision.
  • Bearish ‘dark-cloud cover’ signals downside risk below 211.63 support level.
  • Break above 212.73 could reignite rally toward 213.00 and 215.00 highs.

The GBP/JPY register losses of 0.20& on Wednesday as investors wait for the Bank of Japan monetary policy decision on Thursday. Risk aversion due to an escalation of the Middle East conflict boosted the haven appeal of the Japanese Yen, trimming earlier losses that had driven the pair to a daily high of 212.73. At the time of writing, the cross-pair trades at 211.82.

GBP/JPY Price Forecast: Technical Outlook

After testing yearly highs of 215.00, the GBP/JPY dipped to a yearly low near 207.00 before consolidating around the 210.00-214.00 area over the last four days. As of writing, the cross sits above the 50- and 20-day Simple Moving Averages (SMAs), indicating bullish momentum, as shown by the Relative Strength Index (RSI) standing above its 50-neutral level.

However, Wednesday’s price action left a ‘dark-cloud cover’ looming, which opens the door for some downward pressure, but sellers must decisively clear the March 17 daily low of 211.63 to aim lower. In that outcome, the next area of interest would be the 50-day SMA At 211.42, followed by the 20-day SMA at 211.19. Once surpassed, the next stop would be the March 16 daily low of 210.81.

On the other hand, if the GBP/JPY edges higher, breaching the day’s high of 212.73, the next resistance would be 213.00. Up next lies the year-to-date (YTD) high of 215.00.

GBP/JPY Price Chart – Daily

GBP/JPY Daily Chart

Pound Sterling Price This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD-0.26%-0.08%0.18%0.08%-0.41%0.10%0.37%
EUR0.26%0.19%0.33%0.33%-0.15%0.35%0.62%
GBP0.08%-0.19%0.30%0.14%-0.33%0.15%0.49%
JPY-0.18%-0.33%-0.30%-0.07%-0.57%-0.05%0.20%
CAD-0.08%-0.33%-0.14%0.07%-0.53%0.03%0.30%
AUD0.41%0.15%0.33%0.57%0.53%0.49%0.78%
NZD-0.10%-0.35%-0.15%0.05%-0.03%-0.49%0.24%
CHF-0.37%-0.62%-0.49%-0.20%-0.30%-0.78%-0.24%

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

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

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation
Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."
The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

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.