The GBP/JPY appears to be setting up for a period of consolidation that would make it an ideal pair for scalpers to target, especially considering that the major event risk of the BoE rate decision is in its rearview mirror.
The GBP/JPY has started to consolidate ahead of the 20-Day SMA after a brief period of support following a sharp decline in August. We have seen in the past few months that the technical level has been a gravitating force on the pair which has led to periods of range bound price action.
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A narrowing Bollinger Band width could be a sign of further consolidation for the GB/JPY adding to its attractiveness for high frequency traders. However, significant tightening could foretell of a potential breakout and a clear signal for scalpers to find less risky prospects. A declining ATR also adds to the case for profit potential with scalping based strategies.
[I]To discuss this report contact John Rivera, Currency Analyst: <[email protected]>[/I][B][/B]