• GBP/JPY nosedives 200 pips or 1.30% on Thursday, courtesy of a BoE rate hike.
• GBP/JPY Price Analysis: Downward biased, but it could print a leg-up before the downtrend continues.

With the Bank of England (BoE) hiking rates by 50 basis points, the GBP/JPY surprisingly plummets across the board, more than 200 pips on Thursday. At the time of writing, the GBP/JPY exchanges hands at 157.39 after hitting a daily high of 159.60.

GBP/JPY Price Analysis: Technical outlook

The Pound Sterling (GBP) is losing traction against most G8 currencies. In the case of the GBP/JPY pair, price action dived sharply, towards new weekly lows, after smashing February’s 1 low of 158.90. That accelerated Sterling’s fall, extending below a one-month-old downslope trendline broken on January 20, that was acting as support and capped Wednesday’s drop.

On its way south, the GBP/JPY fell below the 158.00 figure, with bears eyeing to test the January 13 daily low at 155.64, followed by the YTD low at 155.35. But firstly, GBP/JPY bears would need to deal with the January 18 low of 157.27, ahead of the 157.00 figure, and followed by the January 17 low of 156.38.

On the other hand, the GBP/JPY reclaiming 158.00 could pave the way for a leg-up before resuming the downtrend. The GBP/JPY key resistance levels would be a downslope trendline at around 158.20-30, followed by the February 1 daily low of 158.90.

GBP/JPY Key Technical Levels