On Thursday, the British pound (GBP) remained within its prior trading range against the Japanese yen (JPY). Attempts by the pound to gain strength during the Asian trading session fell short, failing to breach the resistance around 213.70. Following some positive economic data from the UK earlier, the pound slipped back to just under 213.30.
Early Thursday reports indicated that the UK’s gross domestic product (GDP) growth had risen to 0.6% in the first quarter, up from 0.2% the previous quarter. Furthermore, unexpected monthly data revealed a 0.3% increase rather than the anticipated 0.2% decline, easing concerns about a significant economic downturn amid the ongoing Iran conflict.
Traders are, perhaps understandably, hesitant to sell the yen due to the potential for further intervention. U.S. Treasury Secretary Scott Bessent recently expressed support for Japan, noting that the U.S. is wary of excessive market volatility after his discussions with Japanese Prime Minister Sanae Takaichi earlier this week.
Technical analysis: Pound remains within previous range
GBP/JPY is currently losing some momentum but is still exhibiting a slight positive outlook in the short term. The 4-hour Relative Strength Index (RSI) is around the 50 mark, which suggests a lack of clear directional bias, and the Moving Average Convergence Divergence (MACD) indicates a stable rather than impulsive situation.
Currently, bulls are struggling to push beyond the 213.70 level, which has essentially blocked the way to May’s highs between 214.20 and 214.40. On the downside, support appears to be holding at 213.15, just before the lows seen on Tuesday and Wednesday around 212.80. If the pound continues to drop, the next support level could be around the lows from May 7th and 11th at 212.30.
