Key Moments
- GBP/JPY has traded in a 210.00-212.00 consolidation band this week after meeting resistance at 214.85 last Friday.
- Tokyo core CPI slowed to 2% in January from 2.3% in December, missing the 2.2% consensus and reinforcing expectations of a cautious BoJ.
- The pair is currently challenging the 20-day SMA near 212.00, with an ascending trendline seen around 213.00 as the next upside level.
Range Trading Around Key Moving Averages
GBP/JPY has spent this week moving sideways between the lower Bollinger band near 210.00 and the 20-day simple moving average (SMA) around 212.00. This consolidation follows a rejection at a key resistance barrier at 214.85 last Friday. During the latest session, the cross has again been attempting to push above the 20-day SMA as buyers test the top of the recent range.
Tokyo CPI Softens, Supporting a Cautious BoJ Stance
The latest inflation print from Tokyo has provided a supportive backdrop for GBP/JPY. Core inflation in the Japanese capital eased to 2% in January from 2.3% in December, undershooting expectations of 2.2%. This figure represents the lowest reading since October 2024 and reinforces the view that the Bank of Japan is likely to proceed carefully with any additional tightening steps.
Technical Picture: Neutral-to-Bullish Bias
Momentum indicators suggest a neutral-to-bullish technical tone. The MACD remains in positive territory while staying below its signal line, reflecting constructive but not strongly accelerating momentum. At the same time, the RSI is hovering flat just above the 50 level, indicating a balanced backdrop with a slight upward bias rather than clear overbought or oversold conditions.
Key Technical Levels
| Level / Indicator | Price | Technical Significance |
|---|---|---|
| Lower Bollinger band | 210.00 | Lower bound of this week’s consolidation range |
| 20-day SMA | 212.00 | Immediate resistance currently being tested |
| Ascending trendline (from early November) | 213.00 | Next upside technical barrier |
| Upper Bollinger band | 214.00 | Key resistance area above the trendline |
| Recent resistance high | 214.85 | Level where the rally stalled last Friday |
| 50-day SMA / lower support zone | 209.50-210.00 | Initial downside area combining moving average and band support |
| 100-day SMA and 161.8% Fibonacci extension | 206.00 | Major support as moving average converges with Fibonacci level |
Upside Scenario: Pound Strength
If sterling gains further traction, GBP/JPY could first seek a more decisive break above the 20-day SMA at 212.00. A sustained move higher would bring the prevailing ascending trendline, drawn from early November and currently located near 213.00, into focus. Beyond that, the upper Bollinger band around 214.00 comes into view as the next notable resistance zone, before revisiting the more significant barrier at 214.85.
Downside Scenario: Yen Strength
If the yen were to strengthen, attention would likely turn to the 209.50-210.00 area, where the 50-day SMA aligns with the lower Bollinger band and marks the first important support region. A break below that zone could open the way toward stronger backing around 206.00, where the 100-day SMA is moving toward the 161.8% Fibonacci extension of the December 2024 – February 2025 significant decline.
Outlook
In summary, GBP/JPY is currently attempting to clear the 20-day SMA at 212.00 after spending the week consolidating between 210.00 and 212.00. If today’s advance continues, the pair may next challenge the ascending trendline near 213.00, with the broader direction likely to be shaped by incoming signals on both pound and yen strength.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
