GBP/JPY Price Forecast: Rallies to two-week top, above 210.50 amid post-BoJ JPY selloff

The GBP/JPY currency pair has surged to a nearly two-week high, surpassing the 210.50 mark during the early European session on Friday. Japanese Yen (JPY) experienced a notable decline following the release of data indicating that Japan's National Consumer Price Index (CPI) remained unchanged in August, and core inflation stayed below the Bank of Japan's (BoJ) 2% annual target. This JPY depreciation was further fueled by the Bank of Japan's surprise dovish rate hike to a 31-year high.

The British Pound (GBP) benefited from expectations of a potential Bank of England (BoE) rate hike, thereby adding strength to the GBP/JPY pair. From a technical standpoint, the GBP/JPY now appears to have gained traction above the 23.6% Fibonacci retracement level of the August-September decline. The Relative Strength Index (RSI) at 66.53 is nearing overbought territory on the 4-hour chart, while the Moving Average Convergence Divergence (MACD) is also situated above the signal line, indicating improving momentum.

However, a potential rally in GBP/JPY may encounter resistance near the 100-period Exponential Moving Average (EMA) on the 4-hour chart, currently at 210.71. This is followed by clustered Fibonacci resistances at the 38.2% retracement level of 211.06, which may constrain the pair's upside near-term despite the recent gains. Despite this, a sustained upward move could propel the pair towards the 50.0% Fibonacci level of 212.29, with additional retracements targeting 213.51, 215.26, and 217.48.

On the downside, immediate support can be found at the 23.6% Fibonacci retracement level at 209.54, with a deeper structural support at 207.09. A sustained break below these levels could open the door for a broader corrective slide.