GBP/JPY Price Analysis: Slides despite BoE’s hawkish tone on rate hike

• GBP/JPY faces a second straight day of losses, trading at 168.33, after BoE raises interest rates by 25 bps.
• The pair finds support at 20-day EMA (168.32) as it remains upward biased despite recent setbacks.
• GBP/JPY could test 170.00 resistance if it stays above 168.30 but may fall below 168.00 if selling pressure persists.

GBP/JPY slides for the second straight day after the Bank of England’s (BoE) decision to raise interest rates by 25 bps, opening the door for further tightening. At the same meeting, the BoE updated its economic projections and sounded “hawkish” but failed to underpin the Pound Sterling (GBP). The GBP/JPY exchanges hand at 168.33 as the Asian session begins after posting losses of 0.76% on Thursday.

GBP/JPY Price Analysis: Technical outlook

GBP/JPY remains upward biased, finding support at the 20-day Exponential Moving Average (EMA) at 168.32, which was severally tested during Thursday’s session. The GBP/JPY crossed below April’s 19 daily high, which turned support at 167.97, a level aggressively defended by buyers.

Even though the pair printed two days of losses of 1.50%, the Relative Strength Index (RSI) indicator remains bullish despite its flat slope. At the same time, the 3-day Rate of Change (RoC), depicts the cross as neutral after reaching back-to-back negative readings.

If GBP/JPY stays above 168.30, that could open the door for further upside. The following resistance level would be the December 13  daily high of 169.27, and up next, the 170.00 figure would be up for grabs.

If any GBP/JPY falls below 168.00, then sellers could lean on that level and drag prices toward the December 20 high shifted support at 167.01. Once cleared, GBP/JPY could test the February 28 high, now support level at 166.00.

GBP/JPY Price Action – Daily Chart