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June 18, 2025

Currencies

GBPJPY Near-Term Outlook: Cautious Central Banks, Compressed Range

1. BoJ Policy & Yen Bias

  • Bank of Japan held rates steady at 0.5% and slowed its JGB tapering, reflecting a gradual, risk-aware normalization path.
  • This cautious stance tempers yen weakness, mainly as global uncertainty (e.g., Fed, geopolitics) drives safe-haven demand.
  • Technically, this reinforces strong resistance near 196.00–196.38.

🔹 Takeaway: The yen's downside is limited unless the BoJ surprises hawkishly or global risk sentiment surges.

2. BoE Stance & Pound Performance

  • The Bank of England is expected to keep rates on hold at 4.25% next week.
  • Market pricing suggests rate cuts in late 2025, but timing is fluid given mixed UK data:
    • Strong Q1 GDP (+0.7%)
    • Rising unemployment (4.6%) and wage deceleration
  • Sterling has struggled to break above May highs near 196.45, reflecting uncertainty over BoE policy direction.

🔹 Takeaway: The pound is firm but lacks momentum without clear BoE signals or fresh economic upside.

3. Technical Dynamics & Risk Flows

  • Price Action:
    • Trading inside a short-term bullish channel
    • Range: 195.00–196.38
  • Key Levels:
    • Upside breakout: A clear move above 196.38 opens the path to 199.80
    • Downside risk: A break below 191.86 would mark a deeper corrective leg
  • Risk Sentiment:
    • Middle East tensions support yen via safe-haven flows
    • Equities and global risk appetite could skew this short-term

GBPJPY – W1 Timeframe

GBPJPYWeekly_(2).png

The price action on the weekly timeframe chart of GBPJPY shows a bearish double break of structure. The price has reached the rally-base-drop supply zone and should slip lower after a rejection from the confluence of the resistance trendline and the supply zone.

Analyst's Expectations: 

Direction: Bearish

Target- 191.108

Invalidation- 198.986

CONCLUSION

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Adetola-Freeman Ogunkunle

Author: Adetola-Freeman Ogunkunle

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