September 24, 2021

GBP/JPY Signals of Trend Change Over the Weekend

 The price chart of the GBP/JPY currency pair in this weekend's trading gives a clearer indication of the change in the bullish trend of the price after the decline at the beginning of the week.

In fact, the price managed to jump higher than the initial level of the price plunge on Monday at 151.00 which was last week's support level.

The price managed to rebound from the support zone of 149.00 this week and passed the resistance of 150.00 and 151.00 on yesterday's big price increase.

The price increase was driven by a hawkish statement by the central bank of England at its September edition policy meeting.

The Bank of England (BOE) has kept interest rates unchanged with its asset purchase program.

However, votes on measures to reduce bond purchases (tapering) by meeting members have increasingly signaled the beginning of policy tightening by the central bank.

The bullish situation was also seen to be taken advantage of by the Pound on the weakness of the Yen this week as Japan's central bank meeting still maintained a loose policy as expected by the market.

In fact, the easing issue of the Evergrande crisis has also restored market sentiment while reducing investor attraction to safe-haven currencies including the Yen.

The price increase on the GBP/JPY chart is seen to continue in today's trading (Friday) but the price momentum slowed until the European session.

The price increase will head to the resistance level of 152.00 to complete the 300 pips weekly increase from the support zone of 149.00.

If the Pound’s strengthening is more pronounced on trading continuing into the New York session, the price could reach the 153.00 high to test the resistance zone that was the focus before.

Even so, investors need to be careful if the market situation changes and sees prices plummet back down.

Previous resistance levels such as 151.00 and 150.00 will return to the levels that will be given attention on the bearish pattern.

The lower decline could reach back to the main support zone this week at 149.00.