GBP/JPY moves within a key range as concerns about BoE easing intensify

crypthub

about 3 hours ago

Technical Consolidation

The GBP/JPY pair has been trapped in a two‑week band between ¥187.5 and ¥190.8. Volume and volatility are low as the 50‑day and 100‑day SMAs converge inside the range. The ATR has contracted to its lowest level in over a month, a classic precursor to a directional breakout.

Chart Pattern and Key Levels

A symmetrical triangle is forming on the daily chart, pointing to a resolution by mid‑April. A close above ¥191.0 could lift the pair toward the recent high near ¥193.5, while a break below ¥187.0 may drive it toward the 200‑day SMA at ¥185.2. The range’s resistance sits around ¥190.8‑¥191.2 and support near ¥187.0‑¥187.5.

Fundamental BoE Easing Drivers

UK inflation slipped to 1.9% in February, its first sub‑2% reading in three years, and core CPI fell to 2.4%. Markets now assign a 70 % probability to a 25‑bp BoE rate cut in May and price 50 bps of easing by November. Minutes from the latest MPC meeting revealed a growing dovish faction, reinforcing the bearish bias on sterling.

Market Sentiment and Real‑World Impact

Analysts note the UK‑Japan yield differential is narrowing, cutting the fair‑value of GBP/JPY by about 2.5%. COT data show leveraged funds trimming net‑long positions and options skew toward puts. A stronger yen in risk‑off episodes would pressure the pair, affecting UK exporters to Japan and Japanese importers of British goods, while encouraging hedging activity.