GBP/JPY Price Forecast: 200-day SMA holds as downside risks linger
GBP/JPY trades in a narrow range on Thursday, with the British Pound (GBP) modestly outperforming the Japanese Yen (JPY). The Yen stays on the back foot for a third consecutive day, reversing part of the intervention-driven rally that briefly sent GBP/JPY below 210.00 at the start of the week.
The British Pound (GBP) has shown modest strength against the Japanese Yen (JPY) on Thursday, with the Yen struggling to gain momentum for the third straight day. GBP/JPY is currently trading around 212.53, just above the key 200-day Simple Moving Average (SMA) level of 211.85. Analysts from Rabobank highlight that the government's recent plans to cut sales tax on food for two years and provide handouts to lower-income households have contributed to the Yen's weakness.
However, these policies may not lead to substantial economic growth, which could be a limiting factor for the Yen's recovery. Technical indicators suggest that GBP/JPY remains under pressure, with the pair currently hovering below multiple SMAs and showing a bearish bias. The next key support levels are the 200-day SMA at 211.85 and the 210.00 horizontal floor.
A break below these levels could trigger a more significant downtrend, while holding above these levels may bring GBP/JPY into a consolidation phase despite the current bearish outlook.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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