GBP/JPY Price Forecast: The Pound dives further, approaching 198.00
- The Pound extends losses to levels near 198.00, depreciating more than 1% so far this week.
- Hawkish comments by BoJ policymakes are keeping the Yen buoyed.
- The Pound suffers on concerns aout UK's fscal health and growing political uncertainty.
The British Pound keeps heading lower on Wednesday against a firmer Japanese Yen, and is on track for a more than 1% depreciation in the last three days, following a reversal from the 200.00 level, and is about to test a key support area at 198.00
The Pound has been hammered by a combination of Yen strength, as comments from BoJ officials have raised expectations of further monetary tightening in the coming months, concerns about the UK fiscal health, and an increasing political uncertainty.
Technical analysis: There is a key support at 197.80-198.00
GBP/JPY sellers are in charge since the pair confirmed the reverse trendline at 200.50 earlier this week. That said, the 4-Hour RSI is entering oversold levels near a key support area below 198.00, which suggests that some consolidation or a corrective rebound might take place at this point.
Bears are likely to be challenged in the area between 197.80 and 198.00, which capped downside attempts in August 20 and 29. Further down, the targets are the 197.35 intra-day level and the August 7 low, at 196.25.
To the upside, previous support at the 199.20 area (September 19, 23 lows) has turned resistance, ahead of the mentioned 200.50 /(September 29 high), and the year-to-date high, at 201.25.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.22% | -0.24% | -0.57% | -0.02% | -0.07% | -0.45% | -0.24% | |
| EUR | 0.22% | -0.00% | -0.36% | 0.19% | 0.17% | -0.21% | -0.02% | |
| GBP | 0.24% | 0.00% | -0.32% | 0.20% | 0.17% | -0.20% | -0.01% | |
| JPY | 0.57% | 0.36% | 0.32% | 0.56% | 0.48% | 0.35% | 0.42% | |
| CAD | 0.02% | -0.19% | -0.20% | -0.56% | -0.05% | -0.41% | -0.22% | |
| AUD | 0.07% | -0.17% | -0.17% | -0.48% | 0.05% | -0.37% | -0.19% | |
| NZD | 0.45% | 0.21% | 0.20% | -0.35% | 0.41% | 0.37% | 0.19% | |
| CHF | 0.24% | 0.02% | 0.01% | -0.42% | 0.22% | 0.19% | -0.19% |
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
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.
