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GBP / JPY appreciates further, approaching long-term highs at 156.05

  • GBP / JPY rally extends to fresh five-month highs at 155.70.
  • The pound continues to trade at the Bank of England’s expectations of a rise.
  • GBP / JPY could go as high as 159.80 – Credit Suisse.

The GBP It appreciated for the sixth day in a row on Thursday, breaking the 155.00 level to approach a three-year high just above 156.00. It remains offered by the weakness of the yen on Thursday, after having gained almost 4% so far in October.

BoE rate hike expectations are supporting sterling rally

The British pound continues to trade in a firm tone, with investors pricing in an interest rate hike by the Bank of England early next year. Rising energy prices have pushed annual inflation to levels almost twice the Bank of England’s target for price stability in the UK, and some Bank officials are beginning to suggest the possibility of accelerating the normalization plan for monetary policy.

Also, a somewhat higher appetite for risk on Thursday has weighed safe assets, such as the Japanese yen, favoring riskier currencies such as the British pound. The world’s major equity markets are making substantial gains, with US indices trading well above 1% at the time of writing.

The Dow Jones was up 1.49% higher, with the S&P and Dow Jones indices advancing 1.62% and 1.68% respectively with upbeat quarterly results offsetting concerns over inflationary pressures and frustrating supply chain bottlenecks. economic recovery.

GBP / JPY could extend rally to 159.80 – Credit Suisse

From a technical point of view, the pair appears poised to extend its rally to levels near 160.00, according to Credit Suisse’s currency analysis team: “With a significant base already established in February 2021, we look for a break above 156.62 a further reinforces the positive outlook, with resistance close to 159.80 “.

Technical levels

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