Pound trading began to show a slight recovery from the dismal performance since last week while investors are now awaiting the outcome of the England central bank meeting after the outcome of the FOMC meeting came into focus earlier this morning.
The Bank of England (BOE) is expected to raise interest rates by 25 basis points at this policy meeting.
The situation is seen to support the strengthening of the Pound after the British currency also came under pressure from a UK employment data report published on Tuesday with a less encouraging reading.
Examining the price movement on the chart of the GBP/JPY currency pair, the price is seen to have started to show a reversal pattern after flattening at the price support zone of 162.00.
The Yen is expected to continue to move gloomily in the market following the actions of the Japanese central bank which wants to maintain its policy easing, choosing not to follow in the footsteps of other major central banks that have moved into a tightening phase.
The bullish pattern displayed on the GBP/JPY chart yesterday was seen to be slower than the decline that has taken place since last week, but investors did not rule it out as an early signal for a change in the price trend.
The rally in yesterday’s New York session was seen to have surpassed the Moving Average 50 (MA50) resistance level on the 1 -hour time frame and gave potential expectations for higher price increases.
If the rise is successfully maintained today, the price is seen to test the resistance at 164.500 before the next surge will re -target the high at the 168.700 zone reached last week.
On the other hand if the price decline continues further towards this weekend’s trading, the price is likely to slip lower below the 162.00 zone to signal a resumption of the previous bearish trend.
The continued decline is seen to reach up to 157.700 if the US dollar manages to strengthen again and push prices lower.
