The GBPJPY price has rejected a key area of support with the price forming a strong bullish engulfing candle. Could this be a sign that the price could trade higher?
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The price of GBPJPY has recently found support at a key level. This recent move could have been driven by the latest announcement from the Bank of England which stated that the central bank has purchased more Government Bonds. The JPY weakness will likely remain in the market if the risk off sentiment begins to fade. The Japanese Central Bank has still refrained from hiking rates despite intervening in the markets a couple of weeks ago.
Looking at the chart we can see that the price has rejected the key 160.50 lows after a week of risk off sentiment. Recently the 4hr time frame has consolidated at this level and if the price breaks out of the consolidation we could see a move into the next levels of resistance. The previous swing lows at 163.00 could be the first level of interest for buyers. If this level fails we could see a move up the recently formed swing highs at 165.50.
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