GBP/JPY struggles for a firm intraday direction, stuck in a range around mid-181.00s

GBP/JPY lacks any firm intraday direction on Monday and oscillates in a narrow trading band.
Intervention fears, China's economic woes benefit the JPY and act as a headwind for the cross.
The BoE’s surprise pause contributes to cap, though the BoJ’s dovish stance limits the downside.

Haresh Menghani FXStreet

The GBP/JPY cross struggles to gain any meaningful traction on Monday and seesaws between tepid gains/minor losses through the early part of the European session. Spot prices currently trade just above mid-181.00s and remain well within the striking distance of the lowest level since August 7 touched last Thursday.

Speculations that Japanese authorities will intervene in the foreign exchange market to support the domestic currency, along with persistent worries over China, benefit the safe-haven Japanese Yen (JPY) and act as a headwind for the GBP/JPY cross. In fact, Japan’s Finance Minister Shunichi Suzuki issued a fresh warning against the recent JPY weakness and said last week that the government will not rule out any options in addressing excess volatility in currency markets.

The British Pound (GBP), on the other hand, continues with its relative underperformance in the wake of the Bank of England's (BoE) surprise pause last Thursday, which, in turn, is seen as another factor capping the upside for the GBP/JPY cross. The UK central bank ended a run of 14 straight interest rate hikes in the wake of the recent deceleration of inflation. That said, a more dovish stance adopted by the Bank of Japan (BoJ) limits any meaningful downside for spot prices.

The Japanese central bank refrained from offering any hints about potential alterations to its negative interest rate policy in the near future. In the post-meeting press conference, BoJ Governor Kazuo Ueda noted that there is no change to the way of the policy decision-making process and that the central bank is yet to foresee inflation reaching the 2% target in a stable manner. This, in turn, suggests that the BoJ is more likely to maintain an ultra-loose monetary policy.

The aforementioned mixed fundamental backdrop, meanwhile, is holding back traders from placing aggressive bets and leads to a subdued range-bound price action around the GBP/JPY cross on Monday. Moreover, absent relevant market-moving economic releases further warrants some caution before positioning for a firm intraday direction.

Technical levels to watch

GBP/JPY

Overview
Today last price	181.53
Today Daily Change	-0.08
Today Daily Change %	-0.04
Today daily open	181.61

Trends
Daily SMA20	183.82
Daily SMA50	183.26
Daily SMA100	180.07
Daily SMA200	171.23

Levels
Previous Daily High	182.31
Previous Daily Low	181.21
Previous Weekly High	183.49
Previous Weekly Low	180.82
Previous Monthly High	186.77
Previous Monthly Low	180.46
Daily Fibonacci 38.2%	181.89
Daily Fibonacci 61.8%	181.63
Daily Pivot Point S1	181.11
Daily Pivot Point S2	180.61
Daily Pivot Point S3	180.01
Daily Pivot Point R1	182.21
Daily Pivot Point R2	182.81
Daily Pivot Point R3	183.3

Author

Haresh Menghani

FXStreet

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

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