GBPJPY has been moving in an uptrend since mid-March, as price has been trading inside a rising forex trend channel visible on its 4-hour forex chart. Price has recently tested the channel support and bounced off the 171.00 major psychological level, possibly making its way back to the top of the channel.
Stochastic is heading down from the overbought zone though, suggesting that a bit of a forex trend selloff might happen. Another test of the channel support could be in the cards before price heads further north, possibly until the channel resistance at 176.00 or until the mid-channel area of interest at 173.50.
Going long at another test of channel support with a stop below 171.00 and a target of 176.00 could yield a high return-on-risk. Adjusting the stop to entry once price tests the mid-channel area of interest could be a good way to minimize exposure.
GBPJPY Forex Trend Forecast
The latest Jackson Hole Summit led to a forex trend selloff for the Japanese yen, as BOJ Governor Kuroda said that they are open to further stimulus if inflationary pressures weaken. He also admitted that there are a few important challenges to be addressed in the labor market, as wage growth is weak and there is an increased reliance on part-time work.
As for the pound, there have been no clear forex trend signals, as traders are still trying to digest the BOE minutes in light of the recent bleak data. Recall that a couple of monetary policy committee members voted to hike rates yet the retail sales and CPI figures released from the UK recently showed weakness. Further signs of a slowdown in the UK could lead to a forex trend breakdown for GBPJPY and a potential short trade on the breach of channel support at 171.00.
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