- The GBP/JPY attracts some sellers about 193.85 in the first European session on Thursday.
- The positive perspective of the cross prevails above the 100 -day key EMA with the RSI Alcista indicator.
- The immediate resistance level arises in the region of 196.00-196.10; The initial support level to monitor is 193.43.
The GBP/JPY crossing remains under some sale pressure around 193.85 during the first European session on Thursday. The Japanese yen (JPY) advances in front of the sterling pound (GBP) in the midst of the perspective that the Bank of Japan (Boj) will rise again. Investors will be attentive to the preliminary reading of the data of the Gross Domestic Product (GDP) of the United Kingdom for the first quarter (Q1), which will be published later on Thursday.
Technically, the positive perspective of the GBP/JPY crossing remains at stake since the price is well supported above the exponential (EMA) mobile average of 100 days in the daily chart. The bullish impulse is reinforced by the relative force index (RSI) of 14 days, which is located above the midline about 56.45, suggesting that a greater advance seems favorable.
The first bullish barrier for the GBP/JPY arises in the 196.00-196.10 area, representing the psychological level and the upper limit of the Bollinger band. Further north, the following obstacle is observed in 196.41, the maximum of May 14. Extended profits could see a rebound around 197.41, the maximum of January 6.
On the other hand, the first level of support to monitor is 193.43, the minimum of May 12. The additional filter is found in 192.06, the EMA of 100 days. A rupture of this level could expose 190.42, the minimum of May 7.
GBP/JPY daily graphics
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
