The price movement on the GBP/JPY currency pair chart is seen to be likely to continue rising further today. Why?
This is because the UK inflation data report published during the European session recorded an encouraging reading.
The UK annual inflation reading rose to 6.2%higher than expected 6.0%, beating the previous reading of 5.5%. The core inflation reading also increased to 5.2% from 4.4%.
This continued to give impetus to the Pound’s strengthening after the central bank of England (BOE) at a policy meeting last week announced an interest rate hike for the second time this year.
Investors are likely to focus on a speech by BOE Governor Andrew Bailey at a conference event taking place today.
Prices on the GBP/JPY chart continued to maintain a bullish pattern after the BOE raised rates last week, while the Bank of Japan (BOJ) maintained a loose monetary policy that kept the Yen moving lower.
The price since last week has remained moving above the support level of the Moving Average 50 (MA50) on the 1 -hour time frame, signaling the movement is still in a bullish trend.
This week’s continued rise has seen yesterday’s surge past the 157.00 resistance zone and reach a high of around 160.00 during the New York session.
The rise continued in the Asian session this morning (Wednesday) to around 161.00 with the expectation of testing the next high at 162.00.
This is the latest high price reached since May 2016.
In the event of a further decline, the level of 157.00 which was the previous resistance zone will be the focus and potentially become a support zone for the price.
The lower decline, which signals a change in the bearish trend, will then lead to the RBS zone (resistance become support) around 156.400.
