- The GBP/JPY quotes in positive territory around 198.40 in the first bars of the European session on Friday.
- The positive perspective of the crossing remains intact above the 100 -day key EMA, with the RSI bullish indicator.
- The immediate resistance level arises in 198.85; The first level of support to watch is 196.95.
The GBP/JPY crossing gains ground until around 198.40 during the early European session on Friday. The Japanese Yen (JPY) weakens in front of the sterling pound (GBP) due to the improvement of the feeling of risk.
Technically, the constructive perspective of the GBP/JPY is maintained since the crossing is well backed above the 100 -day exponential mobile average (EMA) in the daily chart. The bullish impulse is reinforced by the relative force index (RSI), which is located above the midline about 65.00, showing a short -term bunder impulse.
On the positive side, the first bullish barrier for the crossing arises in 198.85, the upper limit of the Bollinger band. A decisive rupture above this level could collect more impulse and point to the psychological level of 200.00. Further north, the next level of resistance is observed in 200.75, the maximum of May 28, 2024.
In the bearish case, the initial support level for the crossing is in 196.95, the minimum of June 24. A rupture of this level could drag at the crossroads around 194.34, the minimum of June 18. The additional filter to be monitored is 193.60, the 100 -day EMA.
GBP/JPY DAILY GRAPH
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.
