Pound-yen approching pre-Brexit highs
The UK is in a technical recession but sentiment overall on the British economy is cautiously optimistic. Inflation has now dropped lower than in the USA though and most participants expect the Bank of England to start cutting from August. Even if that’s correct, the divergence in policy and carry trading for pound-yen is likely to remain for several more years at least. At the time of writing the most likely window for the next British general election is sometime in autumn.
The impression from the chart seems to be more favourable than for dollar-yen: there’s no overbought signal from the slow stochastic and ATR is rising while the price is still above all of the moving averages and momentum has increased in the last few days. The clear target in the next few weeks would be ¥200, but as for other pairs with the yen the BoJ’s upcoming statement is critical for determining whether and when that key psychological area might be reached. Equally, ¥195.85 was June 2015’s high, so it might also be challenging for the price to break through there without a strong driver from news.
Compared to USDJPY, the pound’s gains against the yen have been more stable over the last few quarters. In November and December 2023 the retracement was relatively small, with the important long-term support around ¥178 driving a bounce eventually after repeated testing. The main dynamic support in the short term seems to be the 50-day moving average.
This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.
The impression from the chart seems to be more favourable than for dollar-yen: there’s no overbought signal from the slow stochastic and ATR is rising while the price is still above all of the moving averages and momentum has increased in the last few days. The clear target in the next few weeks would be ¥200, but as for other pairs with the yen the BoJ’s upcoming statement is critical for determining whether and when that key psychological area might be reached. Equally, ¥195.85 was June 2015’s high, so it might also be challenging for the price to break through there without a strong driver from news.
Compared to USDJPY, the pound’s gains against the yen have been more stable over the last few quarters. In November and December 2023 the retracement was relatively small, with the important long-term support around ¥178 driving a bounce eventually after repeated testing. The main dynamic support in the short term seems to be the 50-day moving average.
This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.