GBP/USD Eyes Breakout While USD/JPY Tests Key Support Levels

GBP/USD and USD/JPY are the two key trades to watch during Monday's session, with both pairs approaching technically significant levels. The British pound has been supported by resilient UK economic data and expectations that the Bank of England will maintain a more hawkish stance relative to the Federal Reserve, keeping GBP/USD bid near recent highs. Meanwhile, USD/JPY continues to face downward pressure as the Bank of Japan signals potential further policy normalization, while safe-haven yen demand remains elevated amid global uncertainty. For GBP/USD, traders are watching for a sustained break above recent resistance, which could open the door to further upside. USD/JPY is testing key support, and a decisive break lower would confirm bearish momentum driven by narrowing US-Japan yield differentials. Both pairs reflect broader dollar vulnerability as markets reassess the Fed's rate trajectory. Traders should monitor upcoming UK retail sales data and Japanese inflation figures for additional directional cues this week.