The GBP/JPY cross is experiencing selling pressure for the second consecutive day, retracing from a two-month high near the 195.00 level. This decline is occurring amidst a broadly stronger Japanese Yen (JPY).
Factors Influencing the JPY Strength
- Expectations of further interest rate hikes by the Bank of Japan (BoJ) due to strong wage growth and rising inflation.
- Uncertainty surrounding US trade policies and geopolitical risks, bolstering the safe-haven appeal of the JPY.
Meanwhile, the British Pound (GBP) is struggling as traders await the Bank of England (BoE) decision.
Technical Analysis and Potential Scenarios
From a technical standpoint, the inability of the price to sustain above the 200-day Simple Moving Average (SMA) earlier in the week suggests potential bearish momentum. However, caution is advised due to positive oscillators on the daily chart and a recent breakout through the 192.50 resistance level.
Potential Support and Resistance Levels
- Immediate Downside Protection: 192.50 (former resistance)
- Support Zone: 191.35-191.30
- Further Support: 190.45-190.40, 190.00, 189.70-189.65
- Immediate Resistance: 194.00
- Key Resistance: 200-day SMA around 194.30
- Further Resistance: 194.90, 196.00, 196.40, 197.00
GBP/JPY Daily Chart
Economic Indicator: BoE Interest Rate Decision
The Bank of England's (BoE) interest rate decision is a key event to watch. A hawkish stance, indicated by raising interest rates, is typically bullish for the GBP. Conversely, a dovish approach, such as keeping rates unchanged or cutting them, is bearish.
| Indicator | Details |
|---|---|
| Event | BoE Interest Rate Decision |
| Description | The Bank of England announces its interest rate decision at the end of its eight scheduled meetings per year. |
| Impact | Hawkish (Rate Hike): Bullish for GBP. Dovish (No Change/Cut): Bearish for GBP. |
| Next Release | Thu Mar 20, 2025 12:00 GMT |
| Frequency | Irregular |
| Consensus | 4.5% |
| Previous | 4.5% |
| Source | Bank of England |
Disclaimer: Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.