GBP/JPY Daily Outlook Update The GBP/JPY pair is generally sideways on Thursday, following a mild retracement from the gains seen over the past four days. As of this writing, the pair is trading at 216.45, and the momentum oscillators show little buying pressure. The Japanese Yen remains weak amid concerns about Japan's economy and its lower interest rates relative to other developed countries. However, the mood regarding the British Pound (GBP) remains fragile, as fiscal issues in the UK remain elevated ahead of the Budget on October 28th. The Bank of England's (BoE) recent conservatism in raising rates further is also limiting upside in the Pound. Over the coming days, GBP/JPY will probably stay range-bound until the release of the Tokyo Consumer Price Index (CPI) data on Friday.
In the daily time frame, GBP/JPY shows a minor bullish bias, although technically, consolidation appears to be taking hold. The currency pair remains above the 50-, 100-, and 200-day SMAs, as well as the 61.8% Fibonacci retracement at 215.72, indicating a generally positive technical picture. However, momentum oscillators still show no clear strength. The RSI is at 54, while the MACD trades slightly above the zero line, with bullish divergence fading. Meanwhile, the ADX at 17 levels indicates a weak trend. On the positive side, the first level of resistance is at 217.40, which corresponds to the 78.6% Fibonacci retracement level. Other levels of resistance can be seen at 219.50, which is the recent swing high and the 100% retracement level. On the negative side, 215.84-215.72, where the 50-day SMA intersects the 61.8% retracement level, is the first line of support. Below this is the 100-day SMA at 214.80, followed by the 200-day SMA at 213.90, and the final support level at 212.30.
