GBPJPY has bounced sharply from a key demand zone, indicating renewed bullish momentum. The pair continues to follow the broader bullish bias in GBP crosses, with JPY weakness driven by the Bank of Japan's dovish policy stance.
Technical Analysis (4H Chart)
Pattern: Bullish rejection from the 195.30–195.50 demand zone.
Current Level: 195.58, rebounding from strong support, setting up for a potential upward leg.
Key Support Levels:
195.34 – immediate demand zone and critical support.
194.90 – deeper backup support if a pullback occurs.
Resistance Levels:
197.31 – near-term resistance and first upside target.
199.72 – extended target if bullish continuation strengthens.
Projection: As long as 195.34 holds, GBP/JPY could push toward 197.31, with potential for 199.72 if GBP strength persists.
Fundamental Analysis
Bias: Bullish.
Key Fundamentals:
GBP: Supported by the BOE’s cautious but tight stance due to persistent inflation pressures.
JPY: Remains fundamentally weak, with the BoJ avoiding major policy tightening while intervention threats only provide short-term support.
Risk Sentiment: Mild risk-on conditions favor GBP over safe-haven JPY.
Risks:
BoJ FX intervention could temporarily strengthen JPY.
A dovish BOE shift could slow GBP momentum.
Key Events:
BOE policy updates and UK CPI.
BoJ commentary and risk sentiment indicators.
Leader/Lagger Dynamics
GBP/JPY is a leader among JPY pairs due to GBP’s volatility and strength. It often outpaces EUR/JPY and CHF/JPY, making it a key pair for JPY sentiment shifts.
Summary: Bias and Watchpoints
GBP/JPY is bullish, with price rebounding from the 195.34 demand zone. Upside targets are 197.31 and 199.72. Watch for BOE communication, BoJ intervention signals, and global risk sentiment for confirmation of the move.
Technical Analysis (4H Chart)
Pattern: Bullish rejection from the 195.30–195.50 demand zone.
Current Level: 195.58, rebounding from strong support, setting up for a potential upward leg.
Key Support Levels:
195.34 – immediate demand zone and critical support.
194.90 – deeper backup support if a pullback occurs.
Resistance Levels:
197.31 – near-term resistance and first upside target.
199.72 – extended target if bullish continuation strengthens.
Projection: As long as 195.34 holds, GBP/JPY could push toward 197.31, with potential for 199.72 if GBP strength persists.
Fundamental Analysis
Bias: Bullish.
Key Fundamentals:
GBP: Supported by the BOE’s cautious but tight stance due to persistent inflation pressures.
JPY: Remains fundamentally weak, with the BoJ avoiding major policy tightening while intervention threats only provide short-term support.
Risk Sentiment: Mild risk-on conditions favor GBP over safe-haven JPY.
Risks:
BoJ FX intervention could temporarily strengthen JPY.
A dovish BOE shift could slow GBP momentum.
Key Events:
BOE policy updates and UK CPI.
BoJ commentary and risk sentiment indicators.
Leader/Lagger Dynamics
GBP/JPY is a leader among JPY pairs due to GBP’s volatility and strength. It often outpaces EUR/JPY and CHF/JPY, making it a key pair for JPY sentiment shifts.
Summary: Bias and Watchpoints
GBP/JPY is bullish, with price rebounding from the 195.34 demand zone. Upside targets are 197.31 and 199.72. Watch for BOE communication, BoJ intervention signals, and global risk sentiment for confirmation of the move.
Note
US T-bill yields (3M: 4.165%, 6M: 3.98%) fell slightly, showing a mild decline in front-end rates, which could weigh on USD risk sentiment.Large Fed reverse repo operations ($125.7B) show liquidity absorption but also signal cautious markets.
Brent oil dropped to $68.76 (-1.31%), adding disinflationary pressure and dampening risk appetite.
Note
Trump’s threat to raise tariffs on India while India vows to continue Russian oil imports raises trade-war risks, which usually strengthen JPY as a safe-haven.Note
Falling energy prices and slightly weaker yields add to a cautious tone, which favors JPY demand.Note
UK macro data is relatively quiet, but GBP remains vulnerable to global risk-off moves and potential BOE policy repricing if US weakness deepens.Note
The market remains focused on risk sentiment rather than UK-specific news. No fresh UK macro data reported, meaning GBP is mostly trading as a risk-sensitive currency.Positive risk sentiment from USMCA resolution and a lack of immediate tariff escalation supports GBP, especially against JPY.
Fed 2026 rate cut outlook hints at lower global rate pressure in the future, indirectly easing USD strength and boosting high-beta currencies like GBP.
Note
Japan’s ultra-loose monetary policy remains unchanged, while US yields stay elevated, keeping JPY under pressure.Slightly improved risk tone (e.g., US-Mexico trade resolution) reduces safe-haven demand for JPY.
Trade active
Note
Japan MOF & BOJ Actions: Large bond buybacks (101.2B yen) and lending operations signal efforts to manage yields, indirectly supporting the yen.Kono’s Statement: “Essential to increase rates to boost yen” adds hawkish undertone, even if no immediate rate hike is certain.
Wage Data: June wages up +2.5% YoY (vs 3.1% forecast), still positive, keeping pressure on the BOJ to stay vigilant.
Note
Hawkish BOE tone combined with risk-on bias favors GBPJPY upside, unless safe-haven demand re-emerges if geopolitical risks escalate (Iran or Russia).Note
Fed’s Kashkari suggests two rate cuts may be appropriate this year but notes uncertainty about tariffs’ impact on inflation.Economy is slowing; Fed will respond to data-driven signals.
Emphasis on labor market cooling and potential for preemptive easing.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.