Bullish Structure Remains Intact Until the 216.00 Resistance Is Effectively Tested

Summary:

The Bank of Japan’s latest inflation trend indicator suggests that underlying inflation in Japan remains sustainably above the 2% target level. Meanwhile, BOJ Deputy Governor Ryozo Himino emphasized the importance of maintaining market confidence that inflation will remain under control, further reinforcing expectations for additional policy tightening.

BUY GBPJPY

EXP

TRADING

214.390

Entry Price

219.680

211.200

214.330 +0.139 +0.06%

0.0

Pips

Flat

211.200

Exit Price

214.390

Entry Price

219.680

Fundamentals

The Bank of Japan released fresh data on Tuesday showing that, according to its newly introduced underlying inflation indicator, Japan’s core consumer inflation rate excluding one-off factors accelerated to 2.8% in April from 2.5% in March, remaining well above the central bank’s 2% target.

This indicator excludes institutional factors such as education fee adjustments and government energy subsidies, making it a more reliable gauge of underlying inflation trends in Japan. In comparison, Japan’s previously released benchmark core CPI rose only 1.4% year-over-year, highlighting the BOJ’s effort to communicate that underlying inflation pressures remain relatively strong.

The BOJ began publishing this new indicator in March to improve communication regarding underlying inflation dynamics, which are increasingly important for future policy decisions. April’s stronger reading may further support the case for continued policy normalization.

Meanwhile, BOJ Deputy Governor Ryozo Himino stated on Tuesday that adjusting the degree of monetary accommodation at an appropriate pace is essential for maintaining market confidence that inflation will remain under control amid changing economic, inflationary, and financial conditions. Markets generally interpreted these remarks as a sign that the BOJ remains open to further rate hikes.

Although expectations for BOJ tightening have strengthened, the British pound continues to benefit from relatively higher UK yields and improving market risk sentiment, allowing GBPJPY to maintain a broadly bullish structure.

Bullish Structure Remains Intact Until the 216.00 Resistance Is Effectively Tested_1

Technical Analysis

GBPJPY continues to show an upside bias intraday, with the rebound structure from 210.45 still unfolding. The pair’s short-term target remains the key resistance zone near 216.00.

Structurally, the pair remains within a high-level consolidation-uptrend pattern. As long as prices hold above critical support levels, bulls are likely to retain short-term control. The 216.00 area is expected to provide strong resistance, as it has repeatedly capped upside momentum in previous attempts. Therefore, the first test of this level could temporarily limit further gains.

Nevertheless, until the 216.00 resistance is effectively tested and rejected, the broader bullish structure is unlikely to change materially.

On the downside, a break below the secondary support near 212.60 would likely shift short-term momentum back toward a neutral consolidation phase.

Trading Recommendation

Trade Direction: Buy

Entry Price: 214.04

Target Price: 219.68

Stop Loss: 211.20

Valid Until: 2026-06-25 23:55

Support Levels: 213.80, 213.20, 212.62

Resistance Levels: 214.88, 215.45, 216.60

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