The GBP/JPY currency pair lost its shine after a minor pullback. It hit a low of 190.47 at the time of writing and is currently trading around 190.36. The Potential Reversal Zone (PRZ) is set at 200.20.
The Japanese yen was the best-performing currency last week due to several factors. Traders reduced their short positions against the yen after Japan’s suspected intervention to support it. There are also rising expectations for an interest rate hike by the Bank of Japan, especially following Prime Minister Kishida’s comments on monetary policy. Additionally, the US dollar weakened amid speculation about rate cuts by the Federal Reserve, making the yen stronger. Finally, the yen is seen as a safe-haven currency, attracting investors during times of uncertainty.
Technical Overview
The GBP/JPY is trading below both short-term and long-term moving averages, which suggests a major downtrend. The immediate resistance level is at 190.60. If the price breaks this level, it could rise toward 191.50/192/192.47/193/193.35/193.80/194.15. Support is at 190 and if that fails, the price could drop to 189.75/188.31/186.79/183.
Indicator Analysis
The CCI and ADX indicators suggest a bearish trend.
Trading Recommendation:
Consider selling on rallies around 191 with SL around 192 for a target price of 188.35/186.85.
