GBP/JPY Takes Unexpected Turn as Bearish Momentum Builds
The GBP/JPY currency pair took an unexpected turn on Thursday, losing about 0.39% as risk appetite improved in the market.
Traders are keeping a close eye on the Bank of Japan's potential rate hike later in Friday's session, which could have a significant impact on the cross-pair's value.
A bearish candle pattern known as an 'evening star' has formed in the GBP/JPY price chart, indicating that sellers are pushing the pair lower to test its yearly lows.
The Relative Strength Index (RSI) is currently bearish and close to turning oversold, suggesting that bearish momentum is building up.
According to technical analysis, if the first support at 207.10 is surpassed, it could lead to a resumption of the downtrend structure of lower highs and lower lows.
This would put the December 16, 2025 low of 206.73 in play before the cross-pair potentially dives to the psychological 205.00 milestone.
On the other hand, if GBP/JPY rises above the September 16 high of 209.47, a move to 210.00 is possible, followed by further strength towards the September 4 swing high of 211.82.