GBPJPY enters the summer on shaky footing after the Bank of Japan held rates at 0.5% and slowed its bond tapering, citing global tariff tensions and Middle East risks. Political noise is rising too: with Japan’s July 20 election approaching, opposition calls for looser policy threaten to anchor BOJ dovishness longer than markets expect.
On the UK side, the Bank of England kept rates at 4.25% and signaled it’s likely at the end of its tightening cycle. Recent mixed data have weighed on sterling, keeping GBPJPY pinned near technical ceilings.
Charts show a reversal from long-term resistance near 199.65, leaving bearish patterns like shooting stars and double tops in place. Immediate focus sits on 198.00–198.40 support; a slip below risks extension to 195.80–196.00.
To turn bullish again, the pair needs to decisively reclaim 199.00–199.50. Until then, traders will follow BOJ policy signals, election headlines, and fresh BoE commentary for direction.
GBPJPY – H4 Timeframe
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When price broke above the previous high at the arrow mark, the market sentiment on GBPJPY was confirmed as bullish. Since the impulse originated from the highlighted demand zone, a return to and rejection of the demand would confirm the bullish bias. Considering the additional confluence from the trendline support and the 200-period moving average support, I think it is safe to look forward to a bullish reaction off the demand order block.
Direction: Bullish
Target- 199.913
Invalidation- 195.490
CONCLUSION
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