GBP is having a good week against JPY!
Will the party end at the top of a technical range?
Check out Guppy’s 4-hour chart to see what I’m talking about!
In case you missed it, GBP saw a redemption arc mid-week when word got around that the Bank of England (BOE) MAY be open to extending its bond-buying program beyond this week should economic conditions need it.
Then, the pound’s rally received an extra boost during London session trading when the markets started pricing in a potential U-turn on PM Truss’ mini budget plan.
That’s a lot of gains for a couple of unconfirmed rumors!
In any case, GBP/JPY was able to jump from its 159.70 weekly lows to trade closer to the 167.00 zone.167.00 looks pretty close to the 168.00 range resistance that we’ve marked on the chart!
Will GBP’s party end with the range holding for another day?
Stochastic is on the bears’ side with an overbought signal!
It doesn’t look like the oscillator has turned lower, though, so y’all should be careful in placing bets without price action confirming your biases.
BOE will print its quarterly bulletin today but, unless we get updates about the central bank’s bond-buying or the government’s budget plan, it’s likely that GBP/JPY will trade on market sentiment.
Today’s U.S. retail sales report at 12:30 pm GMT could shake things up even for GBP/JPY.
Look out for better-than-expected results, which could refuel concerns that the Fed will continue to raise interest rates aggressively.
A bit of risk aversion or profit-taking may drag GBP/JPY to its 164.00 mid-range levels or send it on its way back to its weekly lows.
If the government does reverse its budget plans, however, or if BOE confirms its willingness to extend its bond-buying program, then GBP/JPY may finally break above its months-long range.
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