Forex Market: GBP/JPY trading forecast for Monday

Friday’s trade saw GBP/JPY within the range of 181.60-183.72. The pair closed at 183.31, down 0.01% on a daily basis, extending losses from Thursday. The cross rose 0.24% for the whole week, which marked a fourth consecutive weekly gain.

Fundamentals

Japan

BoJ Minutes

At 23:50 GMT on Sunday the Bank of Japan will release the minutes from its meeting on policy, held on February 18th. The minutes offer detailed insights on the central bank’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. Moderate-to-high volatility is usually present after the publication. In case the minutes show a hawkish outlook, this usually supports the yen, while a dovish outlook usually has a bearish effect on the national currency.

The Bank of Japan pledged that it would continue purchasing government bonds in order to boost monetary base at an annual pace of about JPY 80 trillion. The Policy Board also decided by an 8-1 vote to buy exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs), so that their amounts outstanding will expand at an annual pace of about JPY 3 trillion and about JPY 90 billion respectively.

According to excerpts from the Bank of Japans most recent policy statement: ”With regard to the outlook, Japans economy is expected to continue its moderate recovery trend. The year-on-year rate of increase in the CPI is likely to slow for the time being, reflecting the decline in energy prices.”

”Quantitative and qualitative monetary easing (QQE) has been exerting its intended effects, and the Bank will continue with the QQE, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate.”

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 182.88. In case GBP/JPY manages to breach the first resistance level at 184.15, it will probably continue up to test 185.00. In case the second key resistance is broken, the pair will probably attempt to advance to 186.27.

If GBP/JPY manages to breach the first key support at 182.03, it will probably continue to slide and test 180.76. With this second key support broken, the movement to the downside will probably continue to 179.91.

The mid-Pivot levels for Monday are as follows: M1 – 180.34, M2 – 181.40, M3 – 182.46, M4 – 183.52, M5 – 184.58, M6 – 185.64.

In weekly terms, the central pivot point is at 183.01. The three key resistance levels are as follows: R1 – 184.57, R2 – 185.84, R3 – 187.40. The three key support levels are: S1 – 181.74, S2 – 180.18, S3 – 178.91.