Forex Market: GBP/JPY daily forecast

During yesterday’s trading session GBP/JPY traded within the range of 171.37-172.07 and closed at 171.87.

At 7:53 GMT GBP/JPY traded at 171.84, losing 0.08% for the day. The pair touched a daily low at 171.62 at 4:35 GMT.

Fundamental view

At 11:00 GMT Bank of England is to announce its decision on monetary policy. The benchmark interest rate will probably be left unchanged at 0.50%. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank left intact or raised borrowing costs, this would have a bullish effect on the sterling.

At the same time, the monthly pace of bank’s monetary stimulus will probably be left intact as well, at 375 billion GBP. The central bank issues new money in order to purchase gilts from private investors such as pension funds and insurance companies. In case monetary stimulus is increased (in order to further spur economic growth), this will usually devalue nation’s currency.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/JPY manages to breach the first resistance level at 172.17, it will probably continue up to test 172.47. In case the second key resistance is broken, the pair will probably attempt to advance to 172.87.

If GBP/JPY manages to breach the first key support at 171.46, it will probably continue to slide and test 171.07. With this second key support broken, the movement to the downside will probably continue to 170.77.