The GBP/JPY pair has pulled back from its yearly high of 214.30 due to Japan’s intervention to support the Yen. Traders have noticed a bearish candlestick pattern forming and a decline in the Relative Strength Index (RSI), suggesting a possible short-term downward shift. If GBP/JPY falls below 212.00, it could aim for 211.42 and possibly drop to 210.00. Meanwhile, 213.31 is seen as near-term resistance. The British Pound’s decrease against the Yen is linked to Japan’s attempts to strengthen its currency.

Technical Analysis Overview

From a technical perspective, the uptrend of GBP/JPY appears to be holding strong, despite the recent correction. A bearish harami pattern near the highs has led to a dip to around 212.00 in the past three days. Should GBP/JPY rise above 213.31, it might attempt to reach the yearly high of 214.29 again. Recent market movements show the Yen gaining strength against major currencies, especially the Swiss Franc. The heat map shows the Yen’s percentage changes against major currencies this week, illustrating its strength over the Swiss Franc. The changes are listed with the base currency on the left and the quote currency along the top.

Market Intervention and Strategy

Given the decline from yearly highs near 214.30, we need to take Japanese intervention seriously. Officials have historically stepped in during periods of Yen weakness, so verbal warnings often lead to direct actions. Traders should think about buying short-dated GBP/JPY put options with a strike around 211.50 to take advantage of this downward trend. Technical indicators, including the bearish harami candle and the RSI falling from overbought levels, suggest a short-term shift favoring sellers. A bear put spread, like buying a 212.00 put and selling a 210.00 put, could work well to profit as the price approaches this key psychological level. This approach helps define risk while targeting clear support areas. Nonetheless, it’s important to remember the broader context that pushed this pair to its highs. With UK core inflation remaining above 3.5% in the final quarter of 2025, the Bank of England has maintained high-interest rates. This contrasts with the Bank of Japan, which only slowly moved away from its ultra-loose policy last year, offering strong support for the Pound. This pullback could therefore be a valuable long-term buying opportunity. Recent volatility from intervention discussions has likely increased option premiums, making it appealing to sell cash-secured puts with a strike price at or below 210.00. This way, you can earn income while positioning for a potential return to the primary uptrend. Create your live VT Markets account and start trading now.

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