At the start of the week, the British Pound (GBP) is under notable pressure against both the US Dollar (USD) and Japanese Yen (JPY), with traders refraining from aggressive bets ahead of major central bank meetings scheduled this week [1][2]. GBP/USD dropped to the lower end of its monthly range, near the 1.3480 region during the first half of the European session, driven by a broadly firmer US Dollar [1]. Technical analysis highlights the 1.3480-1.3470 area as a confluence support, comprising the 50% Fibonacci retracement of the July-August upswing and the 100-day EMA. A break below this level could trigger further bearish momentum, with deeper support at 1.3420, 1.3352, and 1.3265, while resistance is seen at 1.3516 and 1.3575 [1]. Indicators such as MACD and RSI suggest bullish momentum has moderated, but a decisive move below support is needed to confirm further downside [1].
Meanwhile, GBP/JPY attracted some buyers and maintained a bid tone around 208.25-208.30, but remains close to the year-to-date low touched last Tuesday [2]. The pair is trading below the 200-day SMA and the 23.6% Fibonacci retracement of the April 2025-July 2026 rally, indicating a bearish bias and ongoing consolidation after a recent decline [2]. MACD remains negative and RSI is near 30, signaling persistent downside pressure despite oversold conditions [2]. Resistance is noted at 211.38 and 213.11, while immediate support lies at 206.24 and 202.08, with deeper levels at 197.93 and 192.01 [2].
Market participants are awaiting the US Federal Reserve's policy decision on Wednesday and the Bank of England's announcement on Thursday for GBP/USD, while GBP/JPY traders are focused on the BoE's Wednesday decision and the Bank of Japan's outcome on Friday [1][2]. The BoE is expected to leave rates unchanged, and traders have fully priced in a 25 basis points BoJ rate hike [2]. The future policy path of these central banks is expected to provide meaningful impetus and determine the next directional move for both currency pairs [1][2].
No explicit market reactions or analyst opinions are provided in the articles, but the technical setups and anticipation of central bank decisions suggest cautious trading and potential for increased volatility once policy outcomes are announced [1][2].
CONCLUSION
The British Pound is trading near key support levels against both the US Dollar and Japanese Yen, with technical indicators pointing to persistent bearish pressure. Traders are holding back from major moves ahead of this week's central bank decisions, which are expected to provide direction for GBP/USD and GBP/JPY. The market remains cautious, awaiting policy signals from the Fed, BoE, and BoJ.