- GBP/JPY wins 193.25 near the early European session on Friday.
- The positive prejudice of the cross is over 100 days, but the excess RSI's condition may cover it upside down.
- The level of immediate resistance appears at 193.75; The first downside to watch is 191.73.
The GBP/JPY cross drifts from 193.25 on Friday to 193.25 during the early session of Europe. Japanese yen (JPY) weakens the pound against the pound sterling (GBP) as traders reduce further interest rates hikes in Japanese Bank (BOJ).
On Thursday, Boj kept short -term interest rates permanently by 0.5% and reduced its forecasts regarding economic growth and inflation due to increased trade insecurity in the current year. In addition, due to optimism, the financial markets are considering a global trade conflict to escalate, such as JPY and acts as a GBP/JPY backwind.
According to the four-hour chart, the constructive prospect of the GBP/JPY remains intact as the cross lasts above the main 100-period exponential moving average (mother). However, the relative strength index (RSI) is located near the centerline 74.70, which shows the excess RSI condition. This indicates that further consolidation cannot be excluded until the GBP/JPY evaluation of the near future.
The upper border of the Bollinger strip and on May 2, 193.75, the highest limit is the level of the immediate resistance. The decisive break over this level could be seen until 194.80, the peak of March. Northward to the north, the next hurdles are 195.78, the highest of April 3.
In the case of the Barkh, the initial support level is high in 191.73, 25 April. All followers below the level mentioned may reveal the 190.00 psychological sign. Extended losses could decline until 189.43, which is the lower limit of the Bollinger strip.
GBP/JPY 4-hour chart
Japanese yen FAQ
Japanese yen (JPY) is one of the worlds traded in the world. Its value is widely determined by the Japanese economy, but more specifically the difference between the Japanese Bank's policy, the yield of Japanese and US bonds or traders' quality.
One of the banks of Japanese mandates is currency control, so its moves are key to yen. Boj has sometimes intervened directly in the foreign exchange markets to lower the value of yen in general, although it often refrains from the political problems of its main trade partners. Boj's super-light monetary policy in 2013-2024 made the yen depreciated against its main currency companions, as the political difference between the Japanese Bank and other central banks. Recently, this ultra-light politics have gradually relaxed a certain support to the yen.
Over the last decade, BOJ has caused the Political Policy to enlist the expansion of the Ultra-free monetary policy with other central banks, especially the US Federal Reserve. It supported the expansion of the differential of the 10-year-old US and Japanese bonds, which favored the US dollars towards Japanese yen. BOJ's decision in 2024 will gradually abandon the highly accurate politics with cutting interest rates in other major central banks.
Japanese yen is often considered a safe investment. This means that during the stress of market, investors are more likely to put their money into the Japanese currency due to their alleged credibility and stability. Turbulent times are likely to strengthen the value of yen to other currencies invested.
