**GBP/JPY Weekly Technical Outlook and Market Analysis**
*Original source: ActionForex.com, expanded with additional market data and insights.*
The GBP/JPY currency pair continues to be one of the more volatile and technically compelling pairs among the major Forex crosses. This week’s market behavior has highlighted sustained bullish momentum, with some early signs suggesting a potential pause or reversal in near-term movement. This analysis will break down the key technical components from both the original ActionForex.com article and recent supplementary data, creating a thorough view of GBP/JPY’s outlook.
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## Overview and Market Sentiment
– The British Pound and Japanese Yen cross remains supported by divergent central bank policies. While the Bank of England (BoE) has remained cautious but relatively hawkish, the Bank of Japan (BoJ) continues to maintain ultra-loose monetary policies.
– Rising UK interest rate expectations—based on persistent inflation above the BoE’s 2% target—contrast with Japan’s slow response to inflation, leading to further yen weakness.
– Global risk sentiment plays an important role in GBP/JPY, given the yen’s safe-haven status. Strong equity markets typically encourage yen selling.
– GBP/JPY printed a fresh 2024 high near the 200.50 region before retreating marginally, raising questions of whether the rally has room to continue or a technical correction is looming.
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## Weekly Candlestick Performance
– The GBP/JPY pair closed the week slightly higher, preserving bullish structure above 198.00.
– The weekly candlestick printed a long upper wick, suggesting that the pair met resistance above the 200.00 level and may be encountering buyer fatigue.
– Support remains firm at the psychological 198.00 level, and further down at 196.00, suggesting that dips may still be well-bid unless a more systemic shift in sentiment occurs.
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## Technical Indicators and Key Levels
**Resistance Levels:**
– 200.50: Previous high and psychological barrier, tested but not cleanly broken. Markets are cautious around this level.
– 202.00: Next significant resistance, based on long-term Fibonacci projection and historical pivot points from 2008.
– 204.00: Long-term resistance zone dating back to peaks from 2007.
**Support Levels:**
– 198.00: Immediate support and former resistance-turned-support through 2024.
– 196.00: Next line of defense where buyers might re-emerge on a pullback.
– 192.20: 50-week exponential moving average (EMA) and key confluence level.
**Momentum Indicators:**
– Relative Strength Index (RSI) on the daily chart is trending above 70, suggesting overbought conditions, but not an outright sell signal.
– MACD on both the daily and weekly suggests continued upside momentum, though histogram flattening indicates slowing bullish strength.
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## Elliott Wave and Fibonacci Analysis
– The wave structure from the March 2020 low suggests that the pair remains within a larger impulsive structure.
– ActionForex.com indicates that the pair might be in the fifth wave of an impulsive wave count that began from the 180.00 area.
– Given the current move above 198.00 and approach toward 202.00, this fifth wave could be nearing exhaustion before a possible wave A-B-C correction unfolds.
– A Fibonacci extension from the 180.00 base through the 188.00 and 196.00 swings gives a 1.618 extension target near 202.00 which aligns with upcoming resistance.
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## Trendline and Channel Observations
– On the daily timeframe, GBP/JPY continues to trend within a well-defined ascending channel, with higher highs and higher lows since early 2023.
– The upper bound of the channel currently rests near 202.50, offering future resistance.
– The channel support comes in near 196.30, which could act as dynamic support in the event of
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