GBP/JPY Price Forecast: Rebounds above 207.00 as oversold risk eases

The GBP/JPY edges higher by about 0.29% on Tuesday, even as risk appetite has shifted to the sour side due to geopolitical developments that are driving global bond yields higher amid inflation fears. At the time of writing, the cross-pair trades at 209.02 after bouncing off daily lows of 208.25.

GBP/JPY Price Forecast: Technical Outlook

Price action in the daily chart shows that the cross is trending lower, following two interventions in the FX markets. This sent GBP/JPY tumbling from around yearly highs near 220.00 to current spot prices, for a loss of over 1,300 pips.

The Relative Strength Index (RSI) remains bearish, though momentum tilted modestly upwards after the index crossed from below 30 to nearly 34. Hence, in the short term, GBP/JPY could aim higher, challenging key resistance levels.

If GBP/JPY crosses the August 3 daily low of 209.58, it opens the door to test 210.00. Even though that is positive for bulls, to change the trend, they must surpass the 200-day Simple Moving Average (SMA) at 213.22, paving the way towards the 215.00 mark.

GBP/JPY Price Chart – Daily