Currency markets are flashing strong bullish signals for yen crosses, with EUR/JPY and GBP/JPY moving decisively higher as the Japanese yen remains under broad selling pressure. On Monday, EUR/JPY broke through a key resistance zone at the intersection of the 184.00 level and the 61.8% Fibonacci correction of the previous sharp downward impulse wave 5 from late July. The breakout accelerated the active intermediate impulse wave (3), which is part of the primary impulse wave 1 that began at the end of July. Analysts expect the pair to extend toward the next resistance at 185.30, a level that previously acted as support in mid-July.
Meanwhile, GBP/JPY has reclaimed its 50-day simple moving average, a closely watched medium-term trend indicator, and is now trading around 215.80. Technical indicators are aligning for further upside: the daily MACD has printed a bullish crossover and the 14-day RSI is near 58, leaving room before overbought territory. Immediate resistance is seen at 216.50, followed by the psychological 217.00 handle, with a decisive break above that opening the door toward 218.50. On the downside, the 50-day SMA at 215.20 is the first support, with a stronger floor near 214.00 where the 100-day SMA converges with trendline support.
Fundamentally, the moves are being driven by monetary policy divergence. The Bank of England is expected to keep a comparatively hawkish stance after sticky UK inflation prompted traders to price in fewer rate cuts, while the Bank of Japan's ultra-loose policy continues to weigh on the yen despite intervention warnings from Japanese authorities. Broad risk appetite and stable global equity markets are also supporting risk-sensitive pairs like GBP/JPY. Traders will monitor upcoming UK GDP and Japanese trade data for the next directional cues.
Although these are traditional forex developments, the pronounced yen weakness and risk-on tone are often watched by crypto market participants for potential spillover into digital asset sentiment.
