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Pound Continues to See Noisy Behavior


With no clear indication of risk appetite, the market may remain range-bound for the foreseeable future.

  • The British pound (GBP) has been oscillating against the Japanese yen (JPY) recently, and it looks like the market is trying to break through a significant resistance level.
  • The ¥164 to ¥165 range has been a crucial barrier, and there is a high chance that the market could pull back at any time.
  • The daily candlestick indicates that the market is trying to claw its way back from the bottom, but it remains to be seen if this bullish trend will continue.
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One crucial factor that could affect the GBP/JPY exchange rate is the Bank of Japan’s yield curve control program. This program aims to keep the interest rates below 50 basis points against the 10-year JGB, and any changes in this policy could significantly impact the JPY. As interest rates around the world rise, the JPY may come under pressure as the Bank of Japan may have to print more currency to buy bonds and keep the interest rate down. Conversely, if interest rates fall around the world, the JPY may strengthen a bit.

The market is also range-bound due to the 200-day EMA near the ¥162 level, which is flat, along with the 50-day EMA that sits just underneath it. With no clear indication of risk appetite, the market may remain range-bound for the foreseeable future. Whenever risk appetite seems to pick up, some negative news or event occurs, making it challenging to gauge the market’s direction.

However, the market is not necessarily bearish, as the candlestick from the Wednesday session was bullish. If the market does pull back, it will likely be a slow grind rather than a sharp decline. The GBP/JPY pair has been range-bound for quite some time, with the rare exception of an impulsive candlestick. Therefore, it is likely to remain more or less the same in the near future.

In conclusion, the GBP/JPY exchange rate has been oscillating, with the market attempting to break through a significant resistance level. The Bank of Japan’s yield curve control program and global interest rates could significantly impact the JPY’s strength. The market is range-bound due to the lack of clarity about risk appetite, and any pullback will likely be a slow grind. Overall, it seems like the GBP/JPY pair is likely to remain more or less the same in the coming days.

GBP/JPY chart

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