GBP/JPY rose on Friday for a fifth day in a row, with the Japanese Yen weakening against most major currencies. Higher oil prices have weighed on the Yen because Japan is a large net importer.
The Pound has been supported by a mild rise in risk appetite after worries about the durability of the US-Iran ceasefire eased. Traders are also watching talks planned in Pakistan over the weekend.
GBP/JPY was trading near 214.12, the highest level since 9 February. The UK-Japan interest rate gap has continued to support the pair.
The trend remains upward, with small pullbacks inside a wider rise. The latest move followed a rebound from the 100-day simple moving average at 210.68.
Price is testing the 214.00-215.00 area that has limited gains since mid-January. A clear move above it would allow the uptrend to continue.
The RSI is near 63, suggesting rising momentum without overbought conditions. The MACD has turned positive again after a consolidation period.
If the pair falls, the first support level is the 100-day SMA at 210.68. Below that, the 200-day SMA at 205.52 is the next support area.
We see the GBP/JPY pushing higher, now testing the significant 214.00-215.00 resistance area as of April 10, 2026. This move is largely fueled by the huge difference between UK and Japanese interest rates, which makes holding the Pound more attractive. This interest rate gap, which we saw widen throughout 2025, remains a primary driver of our bullish outlook.
The Bank of England held its rate at 5.50% last month, while the Bank of Japan is only at 0.10%, creating a substantial yield advantage for traders holding Sterling. Adding to this, Brent crude oil prices are hovering around $95 a barrel, putting pressure on the Yen as Japan imports almost all of its oil. These factors create a strong fundamental reason for the pair to continue its upward trend.
Given this setup, we should consider buying call options with strike prices above 215.00, looking to profit from a sustained breakout in the coming weeks. The Relative Strength Index is still below overbought levels at 63, suggesting there is more room for the price to run. A clean break and close above 215.00 would be our trigger to add to long positions.
For those with a higher risk tolerance, selling out-of-the-money put options could be a way to collect premium, banking on the support holding firm. We would use the 100-day moving average, currently around 210.68, as a key level to watch. A break below this support would signal that the immediate upward momentum has faded and would require us to reassess our positions.
