Forex Chart Of The Day: GBPJPY Has Reached Key Resistance Highs

The price of GBPJPY rallied over 450 pips on Friday, will the price continue to trade higher?

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GBPJPY Analysis

The GBPJPY currency pair has recently experienced a significant surge, reaching its October 2022 high of 171.50. The pair’s strong upward momentum can be largely attributed to a combination of factors, most notably the dovish stance taken by the Bank of Japan (BoJ) and the improved risk sentiment in the global markets.

On Friday, the GBPJPY pair rallied over 450 pips, primarily driven by the BoJ’s dovish tone. The central bank’s decision to maintain its ultra-loose monetary policy, along with the extension of its pandemic-era stimulus program, has weighed on the Japanese Yen. This, in turn, has created an environment conducive to a rally in the GBPJPY pair.

Adding to the JPY’s weakness, risk sentiment has improved considerably in the global markets. This has led to a reduction in demand for safe-haven currencies like the Yen, further contributing to its depreciation against the Pound.

On the other side of the equation, the Bank of England (BoE) is closely monitoring the inflation situation in the UK. With inflation remaining stubbornly above 10%, there is an increasing likelihood that the central bank will consider implementing further rate hikes in the near future. Such a move would strengthen the Pound, providing additional fuel for the GBPJPY pair’s rally.

GBPJPY 

The price on the chart has traded through multiple technical levels and some observations included:

• The price has reached the resistance highs of 171.50.
• Price rallied by 450 pips on Friday, which could see price retrace.
• If price forms a double top pattern on the H4 chart, we could see a move back to the highs of 169.00.
• If the risk sentiment remains, we could see price trade higher to 174.50.

Have you watched our Week Ahead analysis? You can see it here. 

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About The Author

Jonathan Kibbler

Jon Kibbler, our Senior Market Analyst, boasts over a decade of trading experience. He specializes in dissecting the intricacies of financial markets and sharing his expertise with precision. Jon’s insights have been featured at renowned events and platforms like Coindex, Forex Analytix, and Forex.com.

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