The Bank of Japan’s loose monetary policy will likely keep the yen weak. In contrast to the BOJ, the Bank of England is expected to tighten monetary policy sooner than the BOJ. A string of UK data indicates the economy is on path to a stronger recovery, leading to the recent strength in the British pound.
GBPJPY rose steadily from August to reach a high of 159.96 in September, a level which has proven to be a strong resistance level. This is a 4-year high and it will be quite challenging to break above it. Any move higher would lead to the next important level of 163.00, an area tested a few times in 2009.
On the daily chart, the pair has retraced to the 23.6% Fibonacci retracement level (of the move from the August 7 low to the September 19 high) where it is currently consolidating. This level of 157.04 is a strong support level which has been tested several times. Prices are also testing the trend line. Next support is at the 38.2% Fibonacci retracement level at 155.22.
The Bank of Japan’s loose monetary policy will likely keep the yen weak. In contrast to the BOJ, the Bank of England is expected to tighten monetary policy sooner than the BOJ. A string of UK data indicates the economy is on path to a stronger recovery, leading to the recent strength in the British pound.
GBPJPY rose steadily from August to reach a high of 159.96 in September, a level which has proven to be a strong resistance level. This is a 4-year high and it will be quite challenging to break above it. Any move higher would lead to the next important level of 163.00, an area tested a few times in 2009.
On the daily chart, the pair has retraced to the 23.6% Fibonacci retracement level (of the move from the August 7 low to the September 19 high) where it is currently consolidating. This level of 157.04 is a strong support level which has been tested several times. Prices are also testing the trend line. Next support is at the 38.2% Fibonacci retracement level at 155.22.
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