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GBP/JPY holds near 217.50 as BoE and BoJ decisions approach
The cross traded around 217.5 after slipping from above 219 earlier this month, with traders citing fading GBP sentiment and limited downside tied to Japan’s wide interest rate gap.
GBP/JPY was trading around 217.50, after the pair briefly rose above 219.00 earlier in the month and then moved into a quieter range, according to FXStreet. The outlet said the loss of upside momentum reflected weaker sentiment toward the British pound rather than a meaningful rebound in the Japanese yen.
FXStreet attributed the renewed Sterling pressure to fiscal concerns that have returned after an initial wave of optimism following the appointment of the UK’s new prime minister. The outlet also pointed to an energy shock weighing on GBP, noting Japan remains broadly weak because of its wide interest rate gap versus other major economies.
With Bank of England and Bank of Japan policy announcements on the calendar later this week, FXStreet said traders were avoiding aggressive directional positioning. Both central banks are widely expected to leave rates unchanged, with attention shifting to their statements and officials’ remarks for guidance on the future path of interest rates and how policymakers plan to respond to energy-driven inflation risks.
On technicals, FXStreet said GBP/JPY sat marginally above the 21-day simple moving average near 217.48 and well above the 50-, 100- and 200-day SMAs, while momentum was mixed. It cited upside levels near 218.50 and 219.61, and support at the 21-day SMA, with deeper downside risk if price action deteriorates toward the 200-day SMA around 211.56.