GBP/JPY is still moving inside a long-term consolidation pattern, as seen on its forex trading 4-hour time frame. The pair has made higher lows but resistance at the 173.00 major psychological level has been holding for the past couple of months.
Traders are waiting for more cues from the BOE before pushing the pair higher. Earlier this year, BOE Governor Mark Carney hinted that the central bank might be ready to hike rates before the UK general elections take place next year. However, data from the UK has failed to impress, leaving several traders unconvinced that the BOE will be ready to tighten monetary policy soon.
Forex Trading Forecast for GBP/JPY
With that, GBP/JPY might continue trading inside the ascending triangle forex trading chart pattern for the meantime. Any breakouts could mean a strong trend though, with the pattern roughly 500 pips in height. This means that a possible rally after an upside break could last by 500 pips while a selloff on a downside triangle break could also last by the same amount.
As for Japan, the BOJ also decided to stay pat with their recent monetary policy statement. According to BOJ officials, the Japanese economy is resilient and is on track to ward off deflation, even with the recently implemented sales tax hike. They did note though that the central bank is ready to ease if the economy slows down.
There is no clear forex trading direction for this pair at the moment, unless the BOE meeting minutes shows that the central bank is less hawkish this time around. After all, there are still a few weak spots in the UK economy and they can’t afford to hurt inflationary pressures in the near term.
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