The GBP/JPY pair has shown a significant turnaround, bouncing back strongly from a critical support zone. This resurgence is in line with the overall upward trend seen in GBP pairs, largely due to the Japanese yen's weakness stemming from the Bank of Japan's accommodative monetary policy.
From a technical standpoint, the 4-hour chart reveals a notable pattern. The pair has rebounded decisively from the 195.30-195.50 support range, indicating a potential shift in market sentiment. With the pair currently trading at 195.73, it's poised for a possible upward move.
Looking ahead, as long as the pair holds above 195.34, it's likely to target 197.30 and potentially 199.70 if the GBP's strength endures. This outlook hinges on sustained buying interest and the pair's ability to break through key resistance levels.
The fundamental picture supports a bullish view, driven by:
1. The Bank of England's balanced approach to monetary policy, which is bolstered by ongoing inflation concerns.
2. The Japanese yen's fundamental weakness, which is rooted in the Bank of Japan's dovish stance and reluctance to tighten policy.
3. A mildly positive risk appetite, which tends to favor the GBP over the safe-haven JPY.
However, two key risks could impact this outlook:
1. Intervention by the BoJ in the FX markets, which could temporarily boost the JPY and disrupt the bullish trend.
2. A shift in the BOE's policy stance towards a more dovish tone, which could undermine the GBP's momentum and alter the bullish trajectory.
From a technical standpoint, the 4-hour chart reveals a notable pattern. The pair has rebounded decisively from the 195.30-195.50 support range, indicating a potential shift in market sentiment. With the pair currently trading at 195.73, it's poised for a possible upward move.
Looking ahead, as long as the pair holds above 195.34, it's likely to target 197.30 and potentially 199.70 if the GBP's strength endures. This outlook hinges on sustained buying interest and the pair's ability to break through key resistance levels.
The fundamental picture supports a bullish view, driven by:
1. The Bank of England's balanced approach to monetary policy, which is bolstered by ongoing inflation concerns.
2. The Japanese yen's fundamental weakness, which is rooted in the Bank of Japan's dovish stance and reluctance to tighten policy.
3. A mildly positive risk appetite, which tends to favor the GBP over the safe-haven JPY.
However, two key risks could impact this outlook:
1. Intervention by the BoJ in the FX markets, which could temporarily boost the JPY and disrupt the bullish trend.
2. A shift in the BOE's policy stance towards a more dovish tone, which could undermine the GBP's momentum and alter the bullish trajectory.
Trade closed manually
We manually close @ 180 pips because of BOE Monetary Policy and official bank rate report ahead.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.