- GBP/JPY is bouncing off the daily lows, although it is down around 0.06% on the day.
- Market participants’ lack of conviction is keeping GBP/JPY range bound.
- GBP/JPY is rangebound with no apparent bias, but Monday’s price action gives “hope” to GBP/JPY bulls.
GBP/JPY has consolidated around the 154.30-156.50 range over the past week as risk sentiment fluctuates between risk-free and active moods. At the time of writing, GBP/JPY is trading at 155.78.
As US equities show, financial markets are mixed, swinging between winners and losers. In the FX complex, a risky trend in the market has boosted demand for risk-sensitive currencies like the British pound. Nevertheless, so far, past losses against the Japanese yen have been reduced.
GBP/JPY Price Prediction: Technical Outlook
GBP/JPY Monday’s price action saw the pair drop towards 155.13, a daily low, although the GBP bounced off the lows as the North American session advanced.
Over the past two days, GBP/JPY price action has printed lower daily highs/lows, suggesting the pair is heading lower, despite daily moving averages (DMAs) indicating that the GBP /JPY is biased to the upside.
That said, GBP/JPY traders could be waiting on the sidelines, expecting a breakout of the 154.30-156.50 trading range.
Nonetheless, the long wick below the “real body” candlestick gave hints that the pair may resume upward movement based on Monday’s price action. The first resistance on the northern path would be 156.00. Once this level breaks, the next resistance would be the February 3rd daily high at 156.50, followed by the 157.00 figure.
On the downside, the breakout of 155.00 would expose the DMAs as targets for GBP/JPY bears.