GBP/JPY Holds Key Support, Downside Risks Persist
The GBP/JPY currency pair is currently trading above its key 200-day simple moving average (SMA), but technical indicators and macroeconomic headwinds suggest that downside risks persist.
The pair has been oscillating within a narrow range, with buyers defending the support zone near 186.00 while sellers eye a potential break lower.
Immediate resistance is seen at 188.20, followed by the psychological handle of 190.00. The 14-day relative strength index (RSI) is hovering near 45, indicating bearish momentum but not yet oversold conditions.
The Japanese yen has been supported by expectations that the Bank of Japan (BoJ) may adjust its monetary policy stance in the coming months, while softer UK economic data and uncertainty surrounding the Bank of England's rate path have weighed on the British pound.