The British pound surged higher against the Japanese yen during the previous week following the rise in risk appetite, and the GBP/JPY may continue to retrace the sell-off from the yearly high (162.62) as investors raise their outlook for global growth.
[B]Currency Pair:[/B] GBP/JPY
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias:[/B] Flat
[B][U]Analysis[/U][/B]
The British pound surged higher against the Japanese yen during the previous week following the rise in risk appetite, and the GBP/JPY may continue to retrace the sell-off from the yearly high (162.62) as investors raise their outlook for global growth. After reaching a high of 197.48 in September, the pound-yen tumbled to a low of 118.83 in January as investors curbed their appetite for risk however, the rebound in market sentiment paired with hopes for a global recovery may push the pair higher throughout the second-half of the year as risk trends continue to drive price action in the currency market. Over the next few hours of trading, the rise in global equities paired with higher commodity prices may drive the GBP/JPY higher to retrace the decline from earlier this month but at the same time, as the relative strength index continues to push into overbought territory, gains are likely to be capped, and we may see the pair fall back to cover the gap from the 120 SMA at 152.86. Moreover, as investors weigh the outlook for future policy, the pound-yen may hold a broad range ahead of the Bank of England meeting minutes due out on Wednesday at 8:30 GMT. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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