The GBP/JPY currency pair is experiencing a degree of selling pressure around the 193.85 level during the early hours of Thursday’s European trading session. This movement comes as the Japanese Yen shows signs of strengthening against the Pound Sterling, largely due to expectations surrounding a potential interest rate increase by the Bank of Japan. As the day progresses, investors are focused on the upcoming preliminary data regarding the UK’s Gross Domestic Product (GDP) for the first quarter, expected to be released later.
Despite the current selling pressure, the technical picture for GBP/JPY suggests a positive sentiment remains intact. The price is trading above the crucial 100-day Exponential Moving Average, indicating robust support. Additionally, the 14-day Relative Strength Index (RSI), situated around 56.45, supports the notion of sustained upward momentum, affirming that further gains could be on the horizon.
In terms of resistance levels, the first significant barrier for GBP/JPY is identified between 196.00 and 196.10. This range not only holds psychological significance but also coincides with the upper boundary of the Bollinger Bands. If the price can overcome this obstacle, the subsequent resistance is set at 196.41, which marks the peak reached on May 14. Should the pair maintain its bullish trajectory, a rise towards 197.41, noted as the high from January 6, could be possible.
Conversely, traders should monitor the support level at 193.43, a point corresponding to the low established on May 12. Additional support lies at 192.06, aligning with the 100-day EMA. A decline below this level could potentially lead to further downside, targeting 190.42, the low recorded on May 7.
