GBP/JPY struggles for direction, stuck in a range above 151.00 mark

GBP/JPY extended its sideways consolidative price action through the mid-European session.
The UK political turmoil weighed on the British pound and kept a lid on any meaningful upside.
Dovish BoJ outlook continued undermining the JPY and helped limit the downside for the cross.

Haresh Menghani FXStreet

The GBP/JPY cross lacked any firm directional bias and remained confined in a narrow trading band, above the 151.00 mark through the mid-European session.

A combination of diverging factors failed to assist the cross to capitalize on a three-day-old uptrend and led to a subdued/rangebound price action on Wednesday. The GBP/JPY cross, for now, seems to have stalled its recent bounce from the vicinity of 149.00 mark, or one-month lows touched last Friday.

The British pound's relative underperformance comes amid the controversy over funding arrangement for Prime Minister Boris Johnson's official apartment. The UK political turmoil overshadowed the optimism over the gradual reopening of the UK economy and capped any meaningful gains for the GBP/JPY cross.

On the other hand, the Japanese yen was weighed down by concerns that the recent surge in COVID-19 cases could hinder Japan's fragile economic recovery. The concerns were acknowledged by the Bank of Japan on Tuesday, warning of high uncertainty about the potential economic fallout from the pandemic.

Adding to this, the BoJ revised its forecast for domestic inflation, which is not expected to reach the 2% target through early 2023. This, in turn, further acted as a headwind for the JPY, which extended some support to the GBP/JPY cross and helped limit the downside, at least for the time being.

That said, worries that soaring coronavirus cases in some other countries could derail the global economic recovery from the pandemic weighed on investors' sentiment. This was seen as another factor that further held traders from placing any aggressive directional bets around the GBP/JPY cross.

Technical levels to watch

GBP/JPY

Overview
Today last price	151.17
Today Daily Change	-0.04
Today Daily Change %	-0.03
Today daily open	151.21

Trends
Daily SMA20	150.97
Daily SMA50	150.36
Daily SMA100	145.99
Daily SMA200	141.83

Levels
Previous Daily High	151.29
Previous Daily Low	150.15
Previous Weekly High	151.98
Previous Weekly Low	149.06
Previous Monthly High	152.79
Previous Monthly Low	148.12
Daily Fibonacci 38.2%	150.86
Daily Fibonacci 61.8%	150.59
Daily Pivot Point S1	150.48
Daily Pivot Point S2	149.74
Daily Pivot Point S3	149.34
Daily Pivot Point R1	151.62
Daily Pivot Point R2	152.03
Daily Pivot Point R3	152.76

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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