GBP/JPY Forecast: Triangle Breakout Signals Potential Bullish Rally to 2007 Highs

The GBP/JPY currency pair has been on an upward trend since February 7, primarily driven by weakness in the Yen and strength in the British Pound. This combination has sparked a potential bullish rally that traders are keenly watching.

Currently, the daily chart for GBP/JPY reveals a symmetrical triangle pattern, which often signals a breakout. If this breakout occurs, analysts suggest the pair could rally toward 222.00, a level not seen since 2007.

In terms of support levels, traders should keep an eye on 194.00, 193.50, and 192.00. Conversely, significant resistance levels are found at 197.50, 198.96, and 200.00. Given its nature, GBP/JPY is one of the more volatile currency pairs in the market, often creating numerous trading opportunities.

In the weeks leading up to today, the weakness of the Yen has contributed to the rising trend, even as the Bank of Japan (BoJ) hints at possible interest rate hikes later this year. Governor Kazuo Ueda indicated that the central bank will continue to raise rates if economic growth and inflation meet expectations. Notably, strong wage increases for the third consecutive year are fueling further interest rate hopes in Japan.

On the other hand, economic indicators from the UK suggest a potentially different scenario, with expectations of future rate cuts. According to the latest data from the Office for National Statistics, the UK’s Consumer Price Index (CPI) rose by just 2.8% in February compared to the previous year, down from 3.0% in January. This figure was below the predicted 2.9%. Core inflation, which excludes volatile food and energy prices, experienced a minor increase to 3.5% in February, lower than the previous month and below expectations.

Despite these trends indicating a weaker GBP and stronger JPY, the recent price actions and chart patterns have suggested an impending bullish trend for the GBP/JPY pair. Examining the technical side of things will provide further insights.

Technical Analysis – GBP/JPY

GBP/JPY Daily Chart, March 27, 2025

From a technical perspective, the daily timeframe indicates that GBP/JPY has steadily climbed since February 7. The pair is currently forming a significant symmetrical triangle, with a breakout appearing likely in the near future.

However, trading triangle patterns often requires some patience. A daily close above the triangle will signal confirmation, although recent market volatility could cause short-term pullbacks. Therefore, observing the four-hour chart could reveal crucial areas to consider.

GBP/JPY Four Hour Analysis

On a four-hour chart, GBP/JPY has recently reached new highs, indicating the potential for a pullback. Nevertheless, there is also the chance for the pair to advance further before any correction takes place.

The 14-period RSI indicator is nearing overbought territory, suggesting caution. A pullback toward the March 26 low at around 193.50 could provide a more favorable entry point for buyers following the triangle breakout. If this level does not hold, a deeper retreat towards the swing low at 192 may be in the cards.

Ultimately, if the triangle pattern unfolds as expected, GBP/JPY could rally to approximately 222.00—an impressive level last observed before the global financial crisis in late 2007.

Support and Resistance Levels

Support Levels:

• 194.00
• 193.50
• 192.00
• 190.00

Resistance Levels:

• 197.50
• 198.96
• 200.00
• 201.65

Overall, as traders navigate these market dynamics, keen attention to both fundamental factors and technical indicators will be crucial. With each movement in the GBP/JPY pair, there may be opportunities for strategic decisions to optimize trading results.

GBP, JPY, Forecast