Today, Wednesday, the GBP/JPY pair halted its pullback from 200.35, showing a solid intraday recovery from the weekly low recorded on Tuesday. The British pound continues to demonstrate relative strength against the Japanese yen, supported by the declining likelihood of an immediate rate cut by the Bank of England. At the same time, the yen is under pressure, as domestic political uncertainty in Japan temporarily complicates the normalization of the Bank of Japan's monetary policy. A generally positive market risk sentiment is also fueling growth in the GBP/JPY rate.

However, persistent geopolitical risks and trade-related uncertainty may limit deeper weakening of the yen as a "safe-haven" currency. Moreover, investors are factoring in the possibility of a Bank of England rate hike toward the end of the year. In contrast, Bank of England Governor Andrew Bailey recently noted that interest rates may gradually decline over the long term. The divergence between the Bank of Japan and the Bank of England's policy outlook creates additional factors that could restrain significant growth in the GBP/JPY pair.

Given the mixed nature of current fundamentals, traders focused on buying should exercise caution, especially in the absence of key economic news from the U.K. and Japan. For better trading opportunities, it may be prudent to wait for Friday's release of U.K. GDP data, which will have a significant impact on the pound and provide a strong impulse for the GBP/JPY rate.

From a technical standpoint, oscillators on the daily chart are positive, with prices trading above the 9-day EMA. The fact that the 9-day EMA also remains above the 14-day EMA confirms the pair's positive outlook.

The nearest resistance is at the round level of 200.00. After that, the pair could retest the September high at 200.35. If prices weaken and fall below the round level of 199.00, the nearest support lies at the 50-day SMA, followed by 198.40, on the way to the round level of 198.00.