GBP/JPY rejected at 38.2% Fibo in Asia

GBP/JPY cross failed to hold above 135.10 (38.2% of 129.07-138.83) in Asia and dipped to a low of 135.67 before recovering slightly to near 135.00 levels.

Markets await BOJ rate decision

Traders await Bank of Japan (BOJ) rate decision due next week. There is a growing speculation that the central bank would trim long duration bond purchases and increase short duration bond purchases.

Experts believe the reverse operation twist could steepen the yield curve and weaken Yen. Meanwhile, the focus would also be on the US FOMC rate decision next week.

GBP/JPY Technical Levels

A break above 135.25 (50-DMA) would open doors for 135.92 (10-DMA) and 136.53 (23.6% of 129.07-138.83). On the other hand, a breakdown of support at 134.47 (Sep 13 low) could yield a drop to 133.95 (50% of 129.07-138.83) and 133.68 (Aug 9 high).