The price chart of the GBP/JPY pair presented an interesting movement in Thursday's trading following the market reaction ahead of the England central bank meeting and also after the meeting results were announced.
The Bank of England (BOE) has fulfilled its forecast to raise interest rates by 25 basis points to 1.25%, maintaining the rate hike for the fifth time in a row.
Interestingly, the Pound initially weakened while investors awaited the outcome of the meeting with the decline having passed the previous support zone at 162.00, hitting this week’s latest low of 160.00.
However, the price then recovered to make another jump after the results of the meeting saw the price jump back to the high level in the Asian session of around 163.700.
Investors started evaluating the bullish trend change signal on the price chart after the rally had re -passed the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the GBP/JPY chart yesterday.
After bullish expectations were driven by the BOE's hawkish decision to support the Pound's strengthening, the Yen added confidence to those expectations following the results of Japan's central bank (BOJ) meeting in the Asian session this morning to see policy easing maintained.
Thus, the gloomy reaction of the Yen has pushed the price further in the Asian session trading this morning (Friday) to cross the 164.500 level connected to the European session.
If the rise continues, the price is expected to re -target the resistance zone at the 168,500 high reached last week.
However, if the price surge is stagnant, a further decline will occur to re -test the price support zone at 162.00.
The continued decline will surpass yesterday's low of 160.00 with the lower target to be targeted at 157.700.
