Forex GBP/JPY Technical Analysis
Published On: 27 January 2023, 3:00 PM | Annabelle Tang, Dealer
Price Chart 1: JPY strengthening against GBP
The GPY/JPY is certainly one of the most interesting currency pair to consider trading right now.
As the ECB is expected to continue with its aggressively large interest rate rises, the BOJ also startled markets worldwide last year when it lifted its cap on ten-year government-bond from ±0.25% to ±0.5% in 20 December 2022.
Depicting the worldwide shock, we see from Price Chart 1 the sharp drop in the currency pair as JPY strengthens against GBP. It should be noted, however, that though BOJ has allowed rates to rise up to 0.5%, it is still a rate that is considered very low when compared to most of the other developed markets.
Therefore, traders can expect a slow reversal against this drop as ECB continues with its aggressively rise of interest rates. With such volatility, traders can most definitely expect to catch plenty of movements and price actions.
Price Chart 2: Price trend over the past two weeks
Taking a closer look at the most recent trends shown in Price Chart 2, we note GBP/JPY to be rising steadily as within expectations. We also noted a strong resistance point that was tested thrice over the past 2 weeks and is depicted in the chart above.
We recommend short term traders to approach the currency pair by “buying the dips”, while swing traders who prefers holding onto positions over a longer time frame to pay extra attention to the resistance line drawn above and amend their strategies accordingly when needed.
Disclaimer
This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs. Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information. Investments are subject to investment risks. The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated. The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low. Clients are advised to understand the nature and risks involved in margin trading. You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product. Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore.
