GBP/JPY Price Forecast: 217.00 caps bulls as RSI fades
- GBP/JPY stays flat as 217.00 continues capping upside.
- Prices remain above key SMAs, preserving neutral-to-bullish structure.
- Break below 215.96 exposes 215.09 and 214.00 support.
GBP/JPY trades flattish for the third straight day as buyers have failed to decisively crack the 217.00 level, which could open the door to further upside. This pushed the cross-pair to the mid-point of the trading range of 216.08-216.85,
GBP/JPY Price Forecast: Technical outlook
The daily chart shows that GBP/JPY is neutral-biased, even though prices are above the 50-, 100-, and 200-day Simple Moving Averages (SMAs), each at 215.96, 215.09, and 212.95, respectively.
Momentum is measured by the Relative Strength Index (RSI), which also suggests that the GBP/JPY is bullish, but it has faded as the index approaches the 50-neutral level. Hence, the cross-pair is poised for sideways action.
For a bullish continuation, the first resistance is 217.00. A breach of the latter will expose the July 9 high at 218.01, followed by the yearly high of 219.61.
On the other hand, a breach of the 50-day SMA at 215.96 opens the path to challenge the 100-day SMA ahead of 215.00. Below the next support is the 214.00 psychological level.
GBP/JPY Price Chart – Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Recommended Articles
