- GBP/JPY is set to continue its upward trend for the fourth consecutive day, effectively pushing past the psychological level of 200.00.
- Technical indicators remain positive, highlighted by a bullish crossover involving the 62.7 RSI and a new MACD signal.
- Traders this week are focused on significant upcoming events, including UK employment and CPI data before Thursday’s decision, along with Japanese CPI figures ahead of Friday’s BOJ meeting.
The British Pound (GBP) has marked its fourth straight day of gains against the Japanese Yen (JPY) as of Monday, with trading approaching its highest point in over a year. Currently, GBP/JPY is hovering around 200.50, reflecting a nearly 0.15% increase for the day, making it the highest level seen since July 24, 2024.
The UK pound is showing strong performance at the week’s outset, while the yen seems somewhat weaker as traders speculate ahead of the Bank of England (BOE) policy decision on Thursday and the Bank of Japan (BOJ) announcement on Friday.
From a technical perspective, the cross is exhibiting a clear bullish trend, maintaining a stable position above both the 21-day Simple Moving Average (SMA) at 199.23 and the 50-day SMA at 198.80. The ability to consistently hold above the psychological mark of 200.00 is reinforcing positive trends, while a relative strength index (RSI) of 62.7 indicates robust upward pressure without hitting overbought conditions.
Additionally, the moving average convergence divergence (MACD) indicator supports this bullish narrative, with the MACD line rising above the signal line, presenting a histogram with green bars. This crossover serves as a fresh bullish signal, hinting at renewed upward momentum following a consolidation phase.
On the resistance front, immediate challenges lie around 2018, which aligns with the peak from July 24, 2024. A firm break above this level could open the door for further upward movement.
Conversely, the initial support level remains at the psychological 200.00, with additional backing near the 21-day and 50-day SMAs. A drop below these support levels might trigger a deeper correction down to 197.50, though the broader trend still appears constructive with prices above 200.00.
Looking ahead, labor market statistics from the UK on Tuesday and inflation figures on Wednesday are likely to provide insights into the BOE’s policy direction. Meanwhile, CPI data from Japan on Friday could introduce additional fluctuation for the yen just before the BOJ’s decision.
