GBP/JPY Price Forecast: Pound-Yen pares gains, eyes trendline support with Fed rate call in focus

• GBP/JPY falls nearly 0.70% to trade around 195.30, erasing Monday's advance.
• Strong US Dollar and steady Japanese Yen pressure British Pound sentiment.
• Pair holds above ascending trendline and 21-day EMA near 194.80 for now

The British Pound (GBP) weakens against the Japanese Yen (JPY) on Tuesday, slipping lower as a resilient US Dollar (USD) and a steady Yen weigh on the Pound's appeal. The GBP/JPY pair is drifting toward its ascending trendline support, with traders remaining cautious ahead of the Federal Reserve's (Fed) key interest rate decision on Wednesday, which could shape near-term risk appetite and set the tone for the next directional move.

The GBP/JPY is down nearly 0.70% on the day, trading around 195.30 and giving back all of Monday's gains after failing to secure a break above 196.50 -- a key level that has capped upside attempts since mid-May.

From a technical standpoint, the GBP/JPY pair remains technically supported above a rising trendline drawn from the early April swing lows, but the recent rejection at 196.50 keeps buyers on the defensive for now. The pair is clinging to its 21-day Exponential Moving Average (EMA), currently near 194.76, which aligns with the trendline and acts as immediate support.

The 14-day Relative Strength Index (RSI) remains just above 50 but is flattening out, indicating waning bullish momentum if no new drivers emerge. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator remains marginally positive but shows limited follow-through, suggesting that price action may remain range-bound in the near term.

On the upside, a daily close above 196.50 is needed to revive bullish momentum and pave the way for a test of the next key barrier at 198.26. A sustained move beyond this could bring the psychological 200.00 level back into focus. Conversely, a decisive break below the 21-day EMA and the trendline support near 194.80 would expose the pair to deeper losses, targeting the 50-day EMA at around 193.55, with further downside risk extending to the 192.00 handle.