GBP/JPY Price- Technical Outlook
- All eyes on Bank of England’s meeting tomorrow
- GBP vs JPY price chart exposes a weaker bullish sentiment
GBP/JPY- Bulls Pullback
On June 5, GBP/JPY rallied to an over three-month high at 139.74 however, the price retreated after as some bulls seemed to cut back. Last week, bulls eased up further causing the pair to close the weekly candlestick in the red with a 3.0% loss.
The Bank of England is expected to increase its quantitative easing program on Thursday’s meeting £150 billion yet, investors are interested to know more what the policymakers would say about the negative interest rates, knowing that any move in this direction is unlikely at the time being.
GBP/JPY Daily PRice CHART ( July 18, 2018 – June 17, 2020) Zoomed Out
GBP/JPY Daily PRice CHART (March 26 – June 17, 2020) Zoomed In
On Thursday, GBP/JPY declined to the current trading zone 133.30 – 135.81 since then, the price failed twice to move to the higher zone highlighting a weaker bullish momentum. On Monday, the price closed above the 50-day moving average signaling that bears were not ready to control the price action.
Thus, a close above the high end of the aforementioned trading zone indicates that bulls could push towards 137.83 then any further close above this level may encourage them to extend the rally towards the 141.00 handle.
In turn, any close below the low end of the zone may embolden bears to press towards 130.84 then any further close below this level could send GBPJPY even lower towards 128.84.
See the daily chart (zoomed in) to know more about the key levels to monitor in both scenarios.
GBP/JPY Four Hour PRice CHART (April 29 – June 17, 2020)
This week, GBP/JPY corrected higher and rallied to 136.35 however, the price retreated later eyeing a test of the uptrend line originated from the May 29 low at 131.78. Hence, any violation of this line would generate a bearish signal while a break above the downtrend line originated from the June 10 high at 137.42 would generate a bullish signal.
A break below 132.91 could send GBPJPY towards 132.23 while a break above 136.63 may trigger a rally towards 137.37. Nonetheless, the daily and support and resistance underlined on the four-hour chart should be kept in focus.
Written By: Mahmoud Alkudsi,Market analyst
Please feel free to contact me on Twitter: @Malkudsi
