- Tech stock advancement creates mixed investor sentiment, allowing GBP/JPY to sustain gains.
- GBP/JPY upward trend continues, eyeing potential reversal upon Bank of Japan's policy shifts.
- In case of a dip below 172.00, GBP/JPY could test the two-week low of 171.19 and further the 170.00 mark.
GBP/JPY edges high but fell shy of reaching a new year-to-date (YTD) high above 172.79 and remains in positive territory, albeit a mixed sentiment amongst investors, as tech stocks advance. Consequently, safe-haven peers like the Japanese Yen (JPY) retraced some of their earlier gains sustained in the Asian session. At the same time, inflation data from the United Kingdom (UK) justifies the need for further tightening, underpinning Sterling (GBP). At the time of writing, the GBP/JPY is trading at 172.46.
GBP/JPY Price Analysis: Technical outlook
From a daily chart perspective, the GBP/JPY uptrend would continue before fundamental reasons change, like the Bank of Japan (BoJ) shifting its monetary policy, could open the door for a good reversal. Nevertheless, once the GBP/JPY falling wedge was broken to the upside, and Cable regained momentum above the May 2 high of 172.33, that opened the door for further gains. Since then, the GBP/JPY consolidated at 171.20-172.79 as buyers prepared to launch an assault and hit the falling-wedge measured target at 174.30.
Hence, the GBP/JPY path of least resistance is upwards. The first line of defense for GBP/JPY sellers would be the YTD high of 172.79, which is broken; the pair will move upwards and test 173.00. A breach of the latter will expose the 174.00 figure, ahead of the falling-wedge objective at 174.30.
On the flip side, if GBP/JPY slips below 172.00, that could pave the way to test the latest two-week low of 171.19 before testing the 170.00 mark. If GBP/JPY dives below that level, the 20-day Exponential Moving Average (EMA) could cap the downfall at around 170.65.
GBP/JPY Price Action – Daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD battles 1.0700 ahead of EU data
EUR/USD has come under renewed selling pressure, testing 1.0700 ahead of the mid-tier EU data this Tuesday. Cautious market mood and disappointing German Factory Orders weigh negatively on the currency pair. The US Dollar rebound adds to the EUR/USD retreat.
GBP/USD turns south toward 1.2400 as US Dollar recovers
GBP/USD is heading south toward 1.2400, meeting fresh supply in the European session. The US Dollar is seeing renewed safe-haven buying amid a risk-off market profile, acting as a headwind to the pair.
Gold oscillates around $1,960 amid mixed responses to Fed’s June policy
Gold price is auctioning inside the woods around $1,960.00 in the early London session. The precious metal is displaying back-and-forth action as the investing community is divided about the interest rate decision by the Fed to be taken in June’s monetary policy meeting.
Is the metaverse hype back in action?
Although there are no major macroeconomic events this week, investors can expect massive volatility on a daily basis. The reasoning behind this outlook is that Apple will be conducting the 2023 Apple Worldwide Developers Conference (WWDC) on June 5.
Markets are likely to focus on ECB commentary
This is a very quiet week in terms of data and hence markets are likely to focus on last minute central bank commentary. The FOMC blackout period kicked off already on Sunday, but today we have a bunch of ECB speakers on the wires.