The GBP/JPY might reach new highs around 210.00. If it breaks this key level, the pair could move towards 213.10, which is the top of the channel. Strong short-term momentum is helping the currency stay on its upward path.

Support And Resistance Levels

If the GBP/JPY faces challenges, its main support is at the nine-day EMA, which is 208.10. Another support level is near the channel’s lower boundary at 207.50. If it falls below the channel, this could harm the upward trend and possibly test the 50-day EMA at 205.10. The Japanese Yen is currently the weakest major currency against the British Pound. The heat map shows percentage changes, with the base currency on the left and the quote currency at the top. The GBP/JPY is climbing above 209.00, confirming a strong bullish trend that we expect to continue. This rise is due to the different monetary policies of the central banks in the UK and Japan. The Pound’s persistent strength indicates that finding ways to join this upward momentum is the best strategy. The Bank of England’s recent increase of its base rate to 5.75% is boosting the Pound’s strength. Recent data for November 2025 shows UK inflation at 3.5%, which is significantly above the target. This contrasts with Japan, which continues its ultra-loose monetary policy.

Monetary Policy Impact

The Japanese Yen remains weak because its economy is still facing challenges. For example, a recent report showed that Q3 2025 GDP fell by 0.2%. This disparity makes borrowing Yen to purchase Pounds—a strategy known as the carry trade—very profitable. This fundamental situation supports the technical outlook of an ongoing rise for the currency pair. For derivative traders, this market scenario makes buying call options appealing, especially with strike prices targeting the 210.00 psychological level and the 213.10 channel top. Given the strong upward momentum, selling cash-secured puts at lower levels can also be an option to earn premium. We believe the trend is still upward for now. Historically, this trend has been growing steadily since the gap in policies widened significantly in 2024. Each dip in prices has been met with aggressive buying, and the ascending channel pattern remains intact. The recent move beyond 209.00 confirms this long-term trend. However, we should stay cautious since the RSI is high, suggesting that the rally might be overstretched. A smart strategy would be to hedge long positions by buying put options with a strike price below the crucial 208.10 support level. This would provide protection against any sudden market reversals in the upcoming weeks. Create your live VT Markets account and start trading now.

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