GBP/JPY hits year to date (YTD) highPublished On: 5 June 2023, 11.05 AM | Kenneth Tan, Head of FX CFD
● GBP/JPY surges to year-to-date (YTD) high amid positive market sentiment. Expectations of a dovish Fed and resolution of the US debt-ceiling renewed strength to higher risk currencies.
● However, despite the overall upward trend with the faster SMA20 crossing over the SMA50 back in March, the technical outlook suggests the pair is potentially overbought with the RSI indicator expressly crossing over the 70 level. This is in-line with the outlook of Pound fundamentally as the Bank of England (BOE) appears hesitant for further rate hikes as they hope the upcoming data releases, suggesting either a weaker economy or slower inflation, will give them room to pause.
● Technically, GBP/JPY appears overbought and as well hitting stiff resistance at the 175 handle. Traders may look to sell above the 175 handle while keeping their protective stop losses closer at the 176 handle.
● Traders who are already in long positions should look to exit levels above the 175 handle.