GBP/JPY Price Forecast: Continues to face selling pressure around 200.00

• GBP/JPY falls sharply to near 199.30 after upbeat Japan's Q2 GDP data.
• The Japanese economy grew by 0.3%, faster than estimates of 0.1%.
• The BoE is expected to maintain its "gradual and careful" monetary easing outlook.

The GBP/JPY pair slides 0.3% to near 199.30 during the Asian trading session on Friday. The cross faces a sharp selling pressure as the Japanese Yen (JPY) has strengthened, following the release of the surprisingly upbeat preliminary Q2 Japan's Gross Domestic Product (GDP) data.

Earlier in the day, the Japanese Cabinet Office reported that the GDP expanded by 0.3% after remaining flat in the previous quarter. Economists expected a moderate growth of 0.1%. On an annualized basis, the economy grew strongly by 1% after a GDP contraction of 0.2% in the previous quarter.

Upbeat GDP data has increased hopes of more interest rate hikes by the Bank of Japan (BoJ) in the near term. On Wednesday, United States (US) Treasury Secretary Scott Bessent said that the BoJ is behind the curve and would tighten its monetary policy further.

Meanwhile, the Pound Sterling (GBP) trades broadly calm on expectations that the Bank of England (BoE) will stick to its "gradual and careful" monetary easing outlook as elevated inflation and better-than-projected Q2 GDP data would offset the impact of labor market concerns.

GBP/JPY continues to face selling pressure near the psychological level of 200.00. However, the near-term trend of the cross remains bullish as the 100-day Exponential Moving Average (EMA) slopes higher around 195.95.

The 14-day Relative Strength Index (RSI) struggles to break above 60.00. A fresh bullish momentum would emerge if the RSI manages to do so.

The pair could extend its upside towards the 23 July 2024 high of 203.16 and the 19 July 2024 high of 204.23, if it stabilizes above the psychological level of 200.00.

On the flip side, a downside move by the pair below the May 6 low of 190.33 will expose it to the March 11 low of 188.80, followed by the February 7 low of 187.00.

GBP/JPY daily chart