Ella 
GBP/JPY pared some of the previous day’s losses to hold above 181.60, up 0.24% on the day.
Near-term resistance is at 181.70; key support to watch is 181.00.
Relative Strength Index (RSI) and MACD indicators are still in the bearish range.
In the early trading hours of the Asian market on Friday, the GBP/JPY cross recovered the recent losses. GBP/JPY is currently trading around 181.62, up 0.24% on the day. The disagreement between the Bank of England (BOE) and the Bank of Japan (BOJ) on monetary policy stances is a tailwind for the GBP/JPY cross.
The Bank of England raised interest rates by 25 basis points (bps) from 5% to 5.25% at its August policy meeting, a 15-year high. With inflation stubbornly high in the UK, markets expect the Bank of England to raise interest rates two more times before the end of the year. On the other hand, Bank of Japan Governor Kazuo Ueda reiterated last week that the central bank will not hesitate to ease policy further and that it will take more time to achieve its 2% inflation target on a sustained basis.
The 4-hour chart shows that the GBP/JPY cross is holding above the 50 and 100 hour EMAs, indicating the least resistance to the upside, supporting the bulls for now.
GBP/JPY sees immediate resistance at 181.70 (50-hour EMA). Significant follow-through buying could pave the way for a test of the next resistance at 182.50 (July 21 high) and onwards to 182.75 (Aug 3 high). After that, GBP/JPY has room to test further upside resistance at 183.20 (1 Aug high).
On the downside, key support is at 181.00, the confluence of the psychological round-number mark and the August 3 low. Next support is seen at 180.45 (3rd Aug low) and then at 179.75 (20th July low). After further losses, GBP/JPY crosses to 179.50 (13 Jul low).
However, the RSI and MACD indicators are still in the bearish range, and the possibility of further downside in GBP/JPY cannot be ruled out.
