The British pound tumbled lower against the Japanese yen following the Bank of England Minutes however, as the GBP/JPY remains well supported by the 100-Day moving average (153.14), the pair may continue to retrace the sell-off from the previous year as investors raise their appetite for risk.
[B]Currency Pair:[/B] GBP/JPY
[B]Chart: [/B]60 Min Charts
[B]Short-Term Bias:[/B] Bullish
[B][U]Analysis[/U][/B]
The British pound tumbled lower against the Japanese yen following the Bank of England Minutes however, as the GBP/JPY remains well supported by the 100-Day moving average (153.14), the pair may continue to retrace the sell-off from the previous year as investors raise their appetite for risk. After reaching a high of 197.48 in September, the pound-yen slipped to a low of 118.83 in January following the surge in risk aversion but nevertheless, the rebound in trader sentiment has pushed the pair higher throughout the first-half of the year, and the British pound may continue to appreciate against its currency counterparts as investors anticipate the BoE to tighten policy over the next 12 months. Over the next few hours of trading, we are likely to see the GBP/JPY push above the 120 SMA (156.20) to work its way toward 158.00-10 (50.0% Fib) following the rebound in global equities however, as the RSI approaches overbought territory, gains are likely to be capped. Nevertheless, as the economic docket for the U.K. is expected to show a 0.4% rise in retail sales, an in-line print is likely to encourage an enhanced outlook for the economy, and we may see the pair retrace the sell-off from the previous week as growth prospects improve. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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