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.
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