GBP/JPY rallies to its highest level since August 2005 as traders look to BoJ on Friday

Source Fxstreet
Apr 25, 2024 09:02

  • GBP/JPY attracts strong follow-through buying for the third successive day on Thursday.
  • The lack of decisive action and the BoJ’s uncertain rate outlook weigh heavily on the JPY.
  • A modest USD downtick benefits the GBP and also contributes to the positive momentum.

The GBP/JPY cross gains strong positive traction for the third straight day on Thursday and spikes to the 195.00 neighborhood, or its highest level since August 2015 during the first half of the European session. 

Despite the recent verbal warnings by Japanese authorities, the lack of any decisive action and the Bank of Japan's (BoJ) cautious approach towards further policy tightening continues to weigh heavily on the Japanese Yen (JPY). This, along with a goodish pickup in demand for the British Pound (GBP), bolstered by a modest US Dollar (USD) weakness, turn out to be key factors that provide a strong boost to the GBP/JPY cross. 

The upward trajectory could further be attributed to technical buying following the overnight breakout through the 192.80-192.85 supply zone and a subsequent strength beyond the previous YTD peak, around the 193.50-193.55 region. Hence, it remains to be seen if the bullish run is backed by genuine buying or turns out to be a stop run as the market focus now shifts to the crucial BoJ decision, scheduled to be announced on Friday.

In the meantime, a mildly softer tone around the equity markets could offer some support to the safe-haven JPY. Apart from this, bets that the Bank of England (BoE) could start cutting interest rates, as early as June, might act as a headwind for the GBP. Heading into the key central bank event risk, the fundamental backdrop warrants some caution before positioning for a further appreciating move for the GBP/JPY cross.

GBP/JPY

Overview
Today last price 194.88
Today Daily Change 1.26
Today Daily Change % 0.65
Today daily open 193.62
 
Trends
Daily SMA20 191.78
Daily SMA50 190.86
Daily SMA100 187.71
Daily SMA200 185.73
 
Levels
Previous Daily High 193.64
Previous Daily Low 192.42
Previous Weekly High 192.84
Previous Weekly Low 190.3
Previous Monthly High 193.54
Previous Monthly Low 187.96
Daily Fibonacci 38.2% 193.17
Daily Fibonacci 61.8% 192.88
Daily Pivot Point S1 192.81
Daily Pivot Point S2 192
Daily Pivot Point S3 191.58
Daily Pivot Point R1 194.04
Daily Pivot Point R2 194.45
Daily Pivot Point R3 195.26

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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