GBP/JPY Price Forecast: Upside bias holds as 21-day SMA cushions declines

• GBP/JPY softens as Sterling retreats following UK political headlines ahead of the November 26 budget.
• Technical setup stays constructive above key moving averages, with the 21-day SMA offering immediate support.
• Momentum indicators flatten, pointing to a potential consolidation before the next directional breakout.

The British Pound (GBP) trades on the back foot against the Japanese Yen (JPY) on Friday after the Pound weakened broadly following a Financial Times report that Prime Minister Keir Starmer and Chancellor Rachel Reeves have abandoned plans to raise income-tax rates ahead of the November 26 budget. At the time of writing, GBP/JPY is trading around 203.00, down nearly 0.30%, after rebounding from an intraday low of 202.34.

From a technical perspective, the daily chart continues to show an overall uptrend, with prices holding comfortably above both short-term and long-term moving averages.

On the downside, the 21-day Simple Moving Average (SMA) at 202.49 is acting as immediate support. A deeper pullback would expose the 50-day SMA near 201.43, followed by a strong confluence zone around the 100-day SMA at 199.97 and the psychological 200.00 level, which also aligns with the horizontal floor of the previous consolidation phase.

Holding above this region keeps the broader bias constructive, while a decisive break below 200.00 could hand near-term control to sellers and open the door for a deeper retracement toward 199.00 and 198.50.

On the upside, the 204.00 area, near this week's highs, marks immediate resistance. A decisive break above that threshold would likely propel GBP/JPY toward fresh year-to-date highs above 205.33.

Momentum indicators reflect a pause in trend strength. The Relative Strength Index (RSI) is neutral around 54, and the Average Directional Index (ADX) remains subdued, suggesting a brief consolidation phase may unfold before the next directional move.