GBP/JPY outlook: Accelerates lower after BoJ rate hike
|GBPJPY extends steep downtrend by dropping 1.7% on Wednesday and on track for the biggest daily drop since 12 July 2023, after BOJ rate hike further boosted yen, while sterling remains deflated by growing expectations that BoE would deliver a 25 basis points rate cut tomorrow.
Markets also focus on today’s Fed rate decision at the end of two-day policy meeting, expecting Chair Powell to add to expectations for three rate cuts by the end of the year, with cycle likely to start in September.
Fresh acceleration lower brought the price well below ascending daily cloud (spanned between 196.50 and 200.39) and broke below 50% retracement of 178.73/208.11 (193.42) to hit the lowest since early May.
Bears pressure next significant support at 191.66 (200DMA), where stronger headwinds could be expected, as daily studies are oversold.
Upticks should be capped under daily cloud base (196.50) to keep bears intact for fresh push lower and possible probe below 190 mark, as BoJ’s fresh hawkishness and dovish BOE, would continue to weigh on the pair.
Res: 193.42; 195.04; 196.50; 197.37
Sup: 191.66; 191.35; 190.29; 189.95
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