At the end of the day, the British pound initially experienced a pullback during Thursday’s trading session but quickly regained strength.
- The GBP/JPY displayed an initial pullback during Thursday’s trading session but swiftly regained momentum, indicating signs of strength.
- The market appears determined to break out to the upside, with a potential target of surpassing the ¥174 level and potentially reaching as high as ¥175.
- This bullish sentiment suggests that buyers have the upper hand, creating a favorable environment for a “buy on the dips” strategy.
When analyzing the chart, it becomes evident that the ¥170 level holds significant importance as a major support level. Additionally, the 50-Day Exponential Moving Average (EMA) is approaching this level, further reinforcing its significance. Given these factors, it is highly likely that buyers will reenter the market, seizing value opportunities along the way. It is important to note that while the market may not experience a direct upward trajectory, buyers currently maintain control. This doesn’t mean that we can’t have the occasional setback, and there will be tough days from time to time.
Furthermore, the substantial interest-rate differential between Great Britain and Japan supports the upward movement of the currency pair. This difference, coupled with the concept of the “carry trade,” provides a reasonable explanation for the ongoing upward trend. Despite the potential for short-term pullbacks, they should be viewed as potential value plays that traders can take advantage of. It is worth noting that shorting the market does not seem advisable, as the Japanese yen is expected to face challenges in the future. It is unlikely that the Bank of Japan will make significant changes to its monetary policy and overall attitude in the near term.
At the end of the day, the British pound initially experienced a pullback during Thursday’s trading session but quickly regained strength. The market’s determination to break out to the upside is evident, with a potential target of surpassing the ¥174 level. The ¥170 level serves as a major support level, attracting buyers as the 50-Day EMA approaches. The interest-rate differential between Great Britain and Japan supports the upward movement, and occasional short-term pullbacks should be viewed as opportunities for value plays. Shorting the market does not appear advisable given the anticipated challenges for the Japanese yen. It is important to monitor the Bank of Japan’s monetary policy decisions, although significant changes are unlikely soon.
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