Forex Video Briefing (6/26) – GBP/JPY’s Reaction BoE’s Proposal


[videojs mp4=”″]

Forex Video Briefing (6/26) – GBP/JPY’s Reaction BoE’s Proposal

The Bank of England is introducing a cap on mortgages. The main proposal is that no more than 15% of mortgage lending will be allowed to go for 4.5x the borrowers income. This is to go into effect Oct. 1st. The British pound liked it. Let’s take a look at the GBP/JPY which is at a crossroad and at the cusp of bullish continuation.

GBP/JPY has been retreating after failing to close above 174 last week. After finding support at 172.70 and after the Mark Carney’s press conference we saw GBP/JPY attack the falling channel resistance from last week.
So far traders in early US session has faded GBP/JPY back into the falling channel. However, if price can hold above 173, and the 1H RSI above 40, the upside risk remains. Otherwise, with a break below 173 and the RSI below 40, this week’s bearish correction is likely to extend.
The failed bullish continuation signal would turn into a bearish correction signal especially if price extends below 172.70, completing a head and shoulders. If this is also marked by a break below the rising trendline in the 4H chart from May’s low of 169.54, then the market is opening up a bearish outlook.

Also note that in the 4H chart, the RSI is holding above 40. If it falls below 40, it should reflect the bearish correction scenario.

With the GBP/JPY at the crossroad, let’s take a look at USD/JPY to get a sense of the market from the JPY-side. We know GBP/JPY rallied off GBP-strength, but JPY is also strong keeping USD/JPY near the 101.60 low. If 101.60 breaks, GBP/JPY is likely to extend the bearish continuation scenario. If USD/JPY rallies above 102, GBP/JPY is likely to be in the bullish continuation scenario.

Previous articleGold (XAU/USD) Awaits Breakout from a Week-long Range
Next articleCryptsy Explains Reddcoin Withdrawal Problems
Jonathan Millet is currently the proud CEO of, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers. He also holds the position of Binary Options Consultant at Before was around, Jonathan was a successful Forex dealer and chief market analyst at Forexyard. He has also worked as a Forex trader. His other specialties include advising financial companies of how to stay head of the competition.