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GBP / JPY rises to three-month highs in the 154.50 zone

  • The pound accelerates past 153.35 to hit multi-month highs at 154.50.
  • The pound is recovering before the expectations of rise of the BoE.
  • GBP / JPY is now approaching long-term highs at 156.05.

The GBP it is trading higher against most major currencies on Friday, and especially against the Japanese yen. The pair GBP/USD it has appreciated more than 1.5% in the last two days, reaching prices close to 154.50 for the first time since the end of June.

BoE rate hike expectations boost sterling

The British pound has appreciated in recent sessions, fueled by heightened expectations that the Bank of England will be the first major central bank to start raising interest rates after the COVID-19 crisis.

Rising energy prices have pushed annual inflation to 3.2% in September, well beyond the Bank of England’s 2% target for price stability. This has forced some officials at the Bank of England to openly suggest the possibility of accelerating rate hikes, which has increased the attractiveness of the British pound for investors.

On the other hand, the Japanese yen, particularly sensitive to monetary policy spreads, is suffering against the British pound and the US dollar. With the Bank of Japan ruling out the possibility of any rate hike in the foreseeable future, and with the yield curve under control, the JPY remains vulnerable to monetary tightening expectations in the rest of the world’s major economies.

GBP / JPY: Approaching long-term highs at 156.00

The pair has accelerated after breaking the resistance zone at 153.35 / 45 to move towards the middle of the 154.00 range reaching overbought levels on the hourly charts, which could anticipate some correction. If the British pound sustains above the aforementioned 153/35/45, the short-term bullish bias could push the pair to test 155.15 (June 23 high) before 155.45 (June 15 high) and 156.05 (June 15 high). May 27).

On the downside, below 155.35 (July 30, August 10 and 11 lows), the pair could seek support at 152.50 / 60 (September 14 and 28 highs) and 150.80 (October 6 lows) .

GBP/JPY

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