GBP/JPY: Down trend?
With the recent rallies over the JPY Paris, there is a likely possibility of big pull backs and maybe even reversals.
With GBPJPY, we have had a sharp decline to the 160 levels when this pair peaked at 168.00. If you also switch the weekly time frame, there has been 2 nice big wick formations on the 167.00 level indicating some great momentum to the downside.
Keeping in mind a with a bullish bounce of off the 160.00 level, this was the BoE announcement, this can also be looked at as press conference noise. Intraday bias in GBP/JPY remains on the downside as fall from 168.67 is in progress. Sustained break of 55 day EMA will bring deeper decline to 155.57 support. On the upside, above 165.14 minor resistance will turn bias back to the upside for 168.67 again.
With these major moves to the down side and taking into account current news and state of the economy with rising inflation, costs of living, fuel prices, is not looking good for the UK economy or any economy. With the bank expecting that CPI inflation to be likely above 9% during the next few months and increase to slightly above 11% in October when the next increase in energy prices comes into effect, rising costs and never changing salaries can have an effect on consumer spending which is not good for the UK economy.
This can exert downwards pressure on GBP Pairs.
Let me know what you guys think?
With GBPJPY, we have had a sharp decline to the 160 levels when this pair peaked at 168.00. If you also switch the weekly time frame, there has been 2 nice big wick formations on the 167.00 level indicating some great momentum to the downside.
Keeping in mind a with a bullish bounce of off the 160.00 level, this was the BoE announcement, this can also be looked at as press conference noise. Intraday bias in GBP/JPY remains on the downside as fall from 168.67 is in progress. Sustained break of 55 day EMA will bring deeper decline to 155.57 support. On the upside, above 165.14 minor resistance will turn bias back to the upside for 168.67 again.
With these major moves to the down side and taking into account current news and state of the economy with rising inflation, costs of living, fuel prices, is not looking good for the UK economy or any economy. With the bank expecting that CPI inflation to be likely above 9% during the next few months and increase to slightly above 11% in October when the next increase in energy prices comes into effect, rising costs and never changing salaries can have an effect on consumer spending which is not good for the UK economy.
This can exert downwards pressure on GBP Pairs.
Let me know what you guys think?
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