Investors have detected a price trend change signal on the chart of the GBP/JPY currency pair?
If you follow developments in the UK, the government and the central bank are still struggling to find the best solution with the objective of economic stability.
The value of the Pound Sterling traded strongly higher on Wednesday yesterday after the market assessed the further development of bond buying measures by the central bank of England (BOE).
According to the BOE's Chief Economist, Huw Pill, the quantitative easing method by the central bank will have the effect of a slower decline in the inflation rate.
Therefore, he expects that there will be a bigger increase in interest rates at next month's policy meeting.
This situation has invited a surge in the value of the Pound, but investors are cautious because they fear the surge will be temporary, with the market's focus on the release of United States (US) inflation data tonight.
Meanwhile, investors are also wary of trading the Japanese Yen currency with the possibility of the Japanese government re-intervening in the market as it did at the end of September last, after the Yen sank to a 24-year low against the US dollar.
On the GBP/JPY chart, there was a rebound in prices on Wednesday yesterday after the price hovered slowly around 160.00 and then climbed higher again to surpass Tuesday's highs.
After reaching the 163,300 level, prices began to slow down around that until trading resumed in the Asian session today (Thursday).
Also giving a bullish signal for the price when yesterday's surge has passed the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/JPY chart.
If the bullish pattern continues, resistance at around 164,500 will be the initial price-tested zone.
Next, the height level reached at the beginning of October last week around 165,700 will be challenged for the price to record the latest height level.
Meanwhile, if the price reverses to make a decline again, a drop below 162.00 will push the price back to yesterday's support level around 160.00.
Resuming the bearish trend is likely to see the price reach around 157,700 to record a 2-week low.
