The GBP/JPY cross remains under selling pressure around 202.20 during the early European session on Tuesday. This downward trend is influenced by a risk-averse market environment and increasing speculation that the Bank of Japan (BoJ) may hike rates next week, which supports the Japanese Yen (JPY) and creates headwinds for GBP/JPY.
From a technical perspective, GBP/JPY retains its bearish outlook on the 4-hour chart as it continues to trade below the critical 100-period Exponential Moving Average (EMA). Furthermore, the Relative Strength Index (RSI) remains in bearish territory below the 50-midline, indicating that extended losses are possible.
Key support for GBP/JPY is at the 202.00 psychological mark. A decisive break below this level could lead the pair to 201.14, the low observed on June 24. Beyond this, further support is found at 200.48, the low from June 21.
On the upside, the immediate resistance level is at 203.16, the high from July 22. The crucial resistance zone to monitor is the 204.00-204.10 region, which includes the psychological level, the 100-period EMA, and the upper boundary of the Bollinger Band.
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