- The GBP/JPY is strengthened around 197.95 in the first measures of the European session on Monday.
- The crossing maintains a constructive perspective above the 100 -day EMA with the RSI Alcista indicator.
- The immediate resistance level is observed in 198.81; The initial support level is located in 194.34.
The GBP/JPY crossing in positive territory for the third consecutive day around 197.95 during the European session on Monday. The Japanese Yen (JPY) weakens in front of the sterling pound (GBP) since the preference of the Bank of Japan (Boj) to advance with caution in the normalization of a monetary policy still lax forces the operators to delay their bets on the probable moment of the next increase of interest rates until the first quarter of 2026.
Technically, the GBP/JPY maintains the bullish vibrates in the daily chart, with the price staying above the average exponential (EMA) mobile key of 100 days. The lower resistance path is upward, since the 14 -day relative force (RSI) index is above the midline about 64.50. This suggests a bullish impulse in the short term.
The first upward objective to be monitored for the crossing is observed in 198.81, the maximum of July 25, 2024. Extended profits could see a rebound towards the psychological level of 200. More to the north, the following obstacle is found in 203.62, the maximum of July 22, 2024.
On the other hand, the initial support level for the GBP/JPY arises in 194.34, the minimum of June 18. A rupture of this level could expose the key level of containment in the 193.30-193.20 zone, which represents the 100-day Ema and the lower limit of the Bollinger band. The additional filter to be monitored is 191.90, the minimum of May 22.
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.
