On Tuesday, the GBPJPY reached a new multi-year high at 182.835; however, it failed to maintain the momentum.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level1)]

• GBP/JPY touches a fresh multi-year top on Tuesday, albeit lacks follow-through.

The pair currently trades last at 182.835.

The previous day high was 183.0 while the previous day low was 181.69. The daily 38.2% Fib levels comes at 182.19, expected to provide support. Similarly, the daily 61.8% fib level is at 182.5, expected to provide support.

The GBP/JPY cross climbs to a fresh high since December 2015 during the early European session on Tuesday, with bulls now awaiting a sustained move beyond the 183.00 mark before placing fresh bets.

The Japanese Yen (JPY) continues with its relative underperformance in the wake of a big divergence in the monetary policy stance adopted by the Bank of Japan (BoJ) and other major central banks. In fact, the markets seem convinced that BoJ’s negative interest-rate policy will remain in place at least until next year. Moreover, BoJ Governor Kazuo Ueda recently ruled out the possibility of any change in ultra-loose policy settings. The, along with a generally positive risk tone, further undermines the safe-haven JPY and acts as a tailwind for the GBP/JPY cross.

Investors turned optimistic after China’s Premier Li Qiang told delegates at the World Economic Forum in Tianjin that economic growth in the second quarter will be higher than the first and is expected to reach the annual projected target of around 5%. Apart from this, a modest pickup in demand for the British Pound (GBP), bolstered by the prevalent US Dollar (USD) selling, turns out to be another factor lending support to the GBP/JPY cross. The upside, however, remains capped on the back of fears that the British economy is heading for a recession.

The market concerns mounted sharply following a surprise 50 bps rate hike by the Bank of England (BoE) last Thursday. Investors also seem worried that further increases in rates to combat high inflation will spark a mortgage crisis and raise borrowing costs for government debt. This is holding back traders from placing aggressive bullish bets around the Sterling. Apart from this, speculations that Japanese authorities may intervene again to support the domestic currency further contribute to keeping a lid on any further gains for the GBP/JPY cross.

It is worth recalling that Japan’s top currency diplomat Masato Kanda stepped up warnings against the recent weakness in the JPY. Adding to this, Japanese Finance Minister Shunichi Suzuki said we will continue to watch the forex market with a sense of urgency and would respond appropriately if currency moves became excessive. This is holding back traders from placing aggressive bullish bets around the GBP/JPY cross. Nevertheless, the aforementioned fundamental suggests that the path of least resistance for spot prices is to the upside.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 182.89 at the time of writing. Pair opened at 182.42 and is trading with a change of 0.26 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 177.36, 50 SMA 172.91, 100 SMA @ 167.76 and 200 SMA @ 165.63.

The previous day high was 183.0 while the previous day low was 181.69. The daily 38.2% Fib levels comes at 182.19, expected to provide support. Similarly, the daily 61.8% fib level is at 182.5, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 181.75, 181.07, 180.44
• Pivot resistance is noted at 183.05, 183.67, 184.35

[/s2If]
Nehcap Expert Advisor
The NEHCAP MT4 EA is high quality professional trading system geared to generate returns without using GRID or martingales. Each trade has strict risk per trade parameter. The pairs under management include EURUSD, GBPUSD, AUDCAD, AUDNZD,GBPAUD, EURAUD, EURCAD, CHFJPY and many more.
The system is trading live: LIVE ACCOUNT TRACKING
You can run it free. Apply for a free trial and track our account. Buy the system or use profit share mechanism to generate returns on your MT4.
Join Our Telegram Group