What Lies Ahead For The GBP/JPY Pair?
BlackBull Markets | May 19, 2022 08:37PM ET
Most traders are aware of the rout that the US dollar is carving into the Japanese yen and the British pound. Since the beginning of March 2022, the USD has appreciated against the yen by 11% and 7% against the pound.
Naturally, with their respective performances against the USD, the pound has strengthened against the yen since the beginning of March. Let us take a look at the technical and fundamental perspective of the GBP/JPY pair moving forward.
h2 GBP/JPY: The Daily Perspective/h2Some long candles have recently begun presenting themselves in the GBP/JPY daily chart, pushing and pulling this pair across a significant range over each trading session. This week, GBP/JPY has swung between 156.30 and 161.80.
As of writing, the GPY/JPY is trading at 159.200. This level aligns closely with a resistance level from three previous highs going back to October 2021. The GBP/JPY blasted through this resistance quite emphatically on March 22, and then slowly trended up to a peak of ~168.00 within a month.
Pessimism in the recession , and the GBP/JPY gave up a good chunk of gains. At the same time, the pound hit a 2-year low against the greenback.
Even so, traders are still aware of the ultra-accommodative policy of the Bank of Japan. Thus, any potential dovishness from the Bank of England in response to the fear of recession is unlikely to reach the levels exhibited by the Bank of Japan. This fundamental factor may help to morph the 158.00 level, once a persistent resistance level, into a firm level of support moving forward.
In the short-term, we might expect some range-bound trading in the GBP/JPY. The Average True Range indicator, on a 2-hour chart, shows weak buying and selling pressure. A bias for a tight range between 158.00 and 162.00 might be desired for a GBP bull. A bear may extend that lower bound down to 155.00 in substitution for 158.00.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.