GBPJPY could face further downside as central banks’ policy paths diverge. Tokyo inflation slowed to 2.5% YoY in Aug, but underlying price momentum remains solid, keeping the BoJ on track for further hikes and supporting the yen. However, US tariffs weigh on Japan’s Exports and Factory Output, raising downside risks to growth that may temper yen strength. In the UK, Business Activity hit a one-year high, led by the Services sector, while sticky inflation has kept expectations for imminent BoE cuts subdued.
Technically, GBPJPY retreated below the 200.00 resistance and the 100% Fibonacci Extension. If the pair weakens further and closes below the Ichimoku Cloud, it could test the ascending channel’s lower bound and support at 195.80. Conversely, a break above 200.00 may trigger a rally toward the 161.8% Fibonacci Extension at 202.80.
By Li Xing Gan, Financial Markets Strategist Consultant to Exness
Technically, GBPJPY retreated below the 200.00 resistance and the 100% Fibonacci Extension. If the pair weakens further and closes below the Ichimoku Cloud, it could test the ascending channel’s lower bound and support at 195.80. Conversely, a break above 200.00 may trigger a rally toward the 161.8% Fibonacci Extension at 202.80.
By Li Xing Gan, Financial Markets Strategist Consultant to Exness
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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.