GBP/JPY Price Forecast: RSI signals exhaustion after a steep 4% decline

GBP/JPY rose on Wednesday as the Japanese Yen weakened, possibly reflecting profit-taking after its recent strong performance. The Relative Strength Index (RSI) indicates oversold conditions, which could allow for a short-term rebound. The cross currently trades around 208.55, following a low of 207.10 earlier in the week, its lowest since December 2025.

GBP/JPY has fallen approximately 4% from above 216, falling below three key moving averages and the psychological 210 support level. These averages now create a resistance area between 213 and 215.50. However, the overall trend remains slightly bullish, with the 50-day SMA above the 100-day and 200-day averages. The RSI near 27 suggests the currency pair is oversold, allowing for a potential rebound or consolidation.

The Moving Average Convergence Divergence (MACD) remains below zero, indicating ongoing downside momentum. Initial resistance on the upside is at the 23.6% Fibonacci retracement at 209.35, followed by the psychological 210 mark and then the 38.2% retracement at 210.74. A successful recovery could aim for the 50.0% retracement at 211.86 and the 61.8% level at 212.98.

Beyond this area, the 200-day SMA at 213 presents a significant hurdle. A strong upturn might create a dense resistance zone in the mid-214.00s, where the 78.6% Fibonacci retracement and the 100-day SMA intersect. The 50-day SMA at 215 is the final major obstacle before the previous high. The downside risks see initial support around 207, with a break below potentially leading to further decline.