GBPJPY: Strong Bullish Reversal from Demand ZoneGBPJPY has bounced sharply from a key demand zone, indicating renewed bullish momentum. The pair continues to follow the broader bullish bias in GBP crosses, with JPY weakness driven by the Bank of Japan's dovish policy stance.
Technical Analysis (4H Chart)
Pattern: Bullish rejection from the 195.30–195.50 demand zone.
Current Level: 195.58, rebounding from strong support, setting up for a potential upward leg.
Key Support Levels:
195.34 – immediate demand zone and critical support.
194.90 – deeper backup support if a pullback occurs.
Resistance Levels:
197.31 – near-term resistance and first upside target.
199.72 – extended target if bullish continuation strengthens.
Projection: As long as 195.34 holds, GBP/JPY could push toward 197.31, with potential for 199.72 if GBP strength persists.
Fundamental Analysis
Bias: Bullish.
Key Fundamentals:
GBP: Supported by the BOE’s cautious but tight stance due to persistent inflation pressures.
JPY: Remains fundamentally weak, with the BoJ avoiding major policy tightening while intervention threats only provide short-term support.
Risk Sentiment: Mild risk-on conditions favor GBP over safe-haven JPY.
Risks:
BoJ FX intervention could temporarily strengthen JPY.
A dovish BOE shift could slow GBP momentum.
Key Events:
BOE policy updates and UK CPI.
BoJ commentary and risk sentiment indicators.
Leader/Lagger Dynamics
GBP/JPY is a leader among JPY pairs due to GBP’s volatility and strength. It often outpaces EUR/JPY and CHF/JPY, making it a key pair for JPY sentiment shifts.
Summary: Bias and Watchpoints
GBP/JPY is bullish, with price rebounding from the 195.34 demand zone. Upside targets are 197.31 and 199.72. Watch for BOE communication, BoJ intervention signals, and global risk sentiment for confirmation of the move.
