The opening of the European session market this afternoon was surprised by developments in the UK which saw an early jump in the value of the Pound Sterling.
Most recently, it was reported that the government led by Prime Minister Liz Truss will postpone the tax cut plan announced last week.
This decision was made following the insistence of MPs who objected to the implementation at the Conservative party conference.
With the postponement, in addition to the interest rate hike by the central bank of England (BOE) at the latest meeting has the potential to support the further strengthening of the Pound in the market.
However, it should be noted that the bond purchase measures by the BOE may also cause the value of the Pound to decline again.
Take a look at the current price action on the chart of the GBP/JPY currency pair which has shown a surge at the beginning of the European session past the resistance level of 162.00.
If examined, the price has shown an encouraging rising pattern to recover from the lowest level reached early last week around 149.00.
On Friday, the price movement was more flat than the previous days surge, seeing the 162.00 level preventing the price from continuing higher.
The price trend is still bullish if evaluated on the movement above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/JPY chart in addition to the rising pattern that has been displayed.
Going to continue trading into the New York session, the price is expected to rise to the 164,500 level to test the resistance level that was the focus before.
The continuation of the continued increase has the potential to support the price reaching up to the height of around 168.00.
However, if the price dips back below the 162.00 level, be alert for early signs of a price trend change that could impact another fall this week.
The initial price drop will be around 160.500 before going to the price support zone at 159.700.
Continuing further decline is likely to see the price drop to the 157.700 level first before a more obvious bearish movement, the price will stop at around 153.00.
