Did you know that the price movement on the GBP/JPY currency pair chart yesterday recorded the latest highs again for a period of 6 years?
Yes correct. The price spike at the opening of trading earlier in the week yesterday reached its highest level since February 2016!
The safe-haven Yen maintained its depreciation that lasted several weeks following dovish policy by Japan’s central bank.
And even more impactful was the Yen when the Bank of Japan (BOJ) reportedly offered an unlimited 10-year Japanese government bond purchase to offset bond yields that hit a 6-year high.
The market reaction in the Asian session yesterday has seen the price spike on the GBP/JPY chart soar past the resistance level of 162.00 to reach the latest high of around 164.500.
Yet in the European session connecting to the New York session the price has made a decline back to the 162.00 zone following the depreciation by the Pound after the market reacted to a rather cautious comment by England’s central bank Governor Andrew Bailey.
The decline however is supported by the Moving Average 50 (MA50) support level on the 1 hour time frame, which still signals for the price to remain moving in a bullish trend.
If the price manages to rebound from the 162.00 zone, the 164.500 resistance reached by the price on yesterday’s surge will be tested again.
Higher rises past that resistance will continue to record the latest 6 -year highs.
On the other hand if the decline in prices that took place in the European session yesterday was the trigger for a movement for a bearish trend, investors should be prepared for a resumption of price falls.
Failure to break the resistance at 162.00 could push the price to start the decline with expectations heading up below the 160.00 level.
The 156.500 level will be the target for further price declines that continue on a clearer bearish trend.
