Trading opportunities for currency pair: since 6th May a bull trend has been forming on the cross. The rate is rising via a complex formation with 28 and 33 bar periods. A break through the 162.50-162.80 resistance zone is expected after 31st May. The targets for the buyers according to the upper limits of the channels are 163.85 and 165.09.
On 21st December the GBP was trading for around 180.70 JPY. At the end of 2015, purchases of the yen were linked to sales of shares on the stock market and the BoJ’s decision. Market participants assessed the Bank of Japan’s economic measures as insufficient for aggressive sales of the Japanese currency.
At that moment the weekly trend line was broken. A weakening was expected from the pound against the yen to 176.00. The target was reached within 3 weeks. By 4th April of this year the GBP/JPY had dropped to 151.64.
Since the beginning of May the GBP/JPY has been in an upward trend with a 360 point range. The pound is generating demand due to surveys about a Brexit being published. The referendum is to be held on 23rd June and the percentage of those wishing to remain in the EU is over 50.
As for the yen, investors expect the BoJ to implement further measures of monetary policy to kick-start the Japanese economy.
Below there is a 4-hour graph. Along the bull trend the minimums formed on average through 33 bars with the maximums via 28 bars. If we track these cycles, we should have a minimum from 31st May at 159.81. So, from 31st May a new phase of pound strengthening is expected.
Today the GBP/JPY broke through the upper limit of the channel with a correctional movement from 162.53. The key resistance is between 162.50 and 162.80. We can suppose that the price will remain below this level until 31st May and the break will take place after the forming of a cup pattern. The buyer’s targets along the upper limits of the channels are 163.85 and 165.09.
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