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The Pound hovers just below the key 200.00 psychological level against the Yen.
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GBP/JPY nears the upper boundary of a minor triangle formation.
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A decisive break above 200.00 could open the path toward the 201.65 resistance zone.
The British Pound posted modest gains on Monday, rebounding after two days of losses. However, GBP/JPY remains confined to a narrow range, struggling to break above the key 200.00 psychological barrier—roughly the midpoint of last week’s trading range.
From a fundamental standpoint, the outlook remains mixed. In the UK, recent economic data has bolstered the case for the Bank of England (BoE) to maintain interest rates at current levels, keeping hawkish sentiment alive. Meanwhile, Japan’s strong GDP and Industrial Production figures last week have strengthened expectations for a potential rate hike by the Bank of Japan (BoJ) in the coming months.
Technical Outlook: GBP/JPY Pressures Triangle Resistance
On the 4-hour chart, GBP/JPY is forming a symmetrical triangle pattern, characterized by lower highs and higher lows. This setup is typically viewed as a continuation pattern, favoring a bullish breakout.
To the upside, immediate resistance is seen at the 200.00 mark—also the intraday high. A confirmed breakout above this level would expose the August 13 high at 200.25, followed by the triangle’s projected target near 201.70, which aligns with the 127.2% Fibonacci extension of the August rally.
On the downside, a bearish reversal would require a clear break below the triangle’s base at 199.30. A drop below that level would bring the August 14 low at 198.65 into focus. A decisive move under 198.65 would confirm a double top formation at 200.25, potentially targeting the next key support around 197.35.
