The British pound back against the Japanese yen after finding short-term support ahead of the 100-Day SMA at 153.27, and the GBP/JPY may continue to retrace the sell-off from earlier this month 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 back against the Japanese yen after finding short-term support ahead of the 100-Day SMA at 153.27, and the GBP/JPY may continue to retrace the sell-off from earlier this month 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 as market participants scaled back on higher yielding assets however, the rebound in market sentiment paired with expectations for a global recovery may lead the British pound higher over the near-term as traders move into higher risk/reward investments. At the same time, Credit Suisse overnight index swaps have trended higher throughout the second-quarter and are up 86bp in August, and long-term expectations for higher interest rates could also lead Cable higher into the following year as market participants anticipate the Bank of England to tighten policy over the next 12 months. Over the next few hours of trading, we may see the GBP/JPY continue to push higher following the rise in global equities however, as the RSI approaches overbought territory, we may see the pair hold below 158.00-10 (50.0% Fib), and pull back to towards 155.00 to fill-in the gap from the 120-SMA at 155.46 before pushing higher. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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