GBP/JPY could break 190 support
The GBP/JPY is displaying a bearish engulfing candle on its daily chart - and similar patterns are observed on all other major yen pairs.
The GBP/JPY outlook has turned bearish as the Japanese yen gains strength amidst falling global bond yields, driven by softer-than-expected US and UK inflation data. Markets have shifted Fed rate-cut expectations forward, leading to a rally in bonds and a decline in yields across major economies. This has boosted the appeal of the low-yielding Japanese yen, especially and Japan's own bond yields have been hitting multi-year highs lately.
Japan’s yields, supported by hawkish comments from BoJ Governor Ueda and potential rate hikes, have contributed to narrowing the yield gap with other nations, boosting the yen’s performance.
From here, the GJ could drop to take out key support around the 190.00 in the coming days. If that happens, we could see further follow-up technical selling in the days ahead.
Key resistance comes between 193.00 to 194.20 area. Yesterday's low (now broken) at 191.50 is now the most important near-term resistance to watch.
By Fawad Razaqzada, market analyst at FOREX.com
The GBP/JPY outlook has turned bearish as the Japanese yen gains strength amidst falling global bond yields, driven by softer-than-expected US and UK inflation data. Markets have shifted Fed rate-cut expectations forward, leading to a rally in bonds and a decline in yields across major economies. This has boosted the appeal of the low-yielding Japanese yen, especially and Japan's own bond yields have been hitting multi-year highs lately.
Japan’s yields, supported by hawkish comments from BoJ Governor Ueda and potential rate hikes, have contributed to narrowing the yield gap with other nations, boosting the yen’s performance.
From here, the GJ could drop to take out key support around the 190.00 in the coming days. If that happens, we could see further follow-up technical selling in the days ahead.
Key resistance comes between 193.00 to 194.20 area. Yesterday's low (now broken) at 191.50 is now the most important near-term resistance to watch.
By Fawad Razaqzada, market analyst at FOREX.com
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