GBPJPY Forecast

The Governor of the Bank of England, Andrew Bailey, has said that the bank “will have to act” on rising inflation, which led many to expect a rate rise in November.

But the bank decided to hold rates at 0.1%. A rise is still widely expected in the next few months. Extracted from: https://www.bbc.com/news/business-57764601

The economy is rebounding after the pandemic outbreak, if they manage to increase their bank rate that would mean people would be encouraged to invest as that will result in more return on investment and it will decrease the prices for normal daily routines including gas prices. Let us take a look at the technical analysis of the GBPJPY and how we could take advantage of it.

Monthly Chart

This chart is really rapidly rebounding from the pandemic outbreak, we can see the difference from 2020 till now, the bank of England is really working timelessly to recover from the pandemic. This month‘s candle has not closed as yet but we can see that it is still bearish at the moment, with a minor exhaustion from the previous month’s candle high. Let us take a look at the lower timeframe charts for more details and structure movements.

Weekly Chart

Weekly chart has been bearish for the past six weeks, which means that the current momentum is still more bearish than anything else. There is also a weekly exhaustion zone around 150.362 price mark. This pair has not yet reached the exhaustion zone but it is also where we could expect buying opportunities.

Daily Chart

One of the things that determines where the market is willing to go is viewing its behavior, the only point that was lastly broken in this chart is the high not a low point in terms of this timeframe structure so in most cases that usually means the market is still on an uptrend.

Four-Hour Chart

This chart is on a retracement which is trending below the four-hour counter trend line. This pair is still on a sell zone at the moment, we would like to see the counter trend line being broken first in order to release the selling pressure or the bearish momentum. GBPJPY just currently bounced off 78.6% of our fib level if this pair does not break the 100% retracement mark, we are still on a bullish structure, but if this pair breaks below 100% retracement level, we could experience a potential trend direction continuation to be bearish, for the overall trend direction to change, it must also break the daily chart structure. Around 88.6% of our fib level there is also a weekly exhaustion zone which seems like our first point of interest, but we can not place our buys blindly we need more confluence like a break of that counter trend line, a break of structure and a retest of our newly formed point of interest at that particular time.

If the bank of England continues to manage to raise the rates and their economy, it is most likely to see this uptrend progress. Download WikiFX app for more updates on this pair.