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Market Analysis

Home » Technical Analysis » Daily » GBPJPY – Japanese Yen Outpaces British Pound

GBPJPY – Japanese Yen Outpaces British Pound

Posted by FXTimes in Daily - June 16th, 2016 7:07 am GMT

GBPJPY Pound yen

Key Points

  • British Pound tumbled against the Japanese Yen recently, and broke a major support area.
  • There was a monster support around 149.20-40 levels, which was cleared by sellers during the downside move.
  • Today in Japan, the BoJ Interest Rate Decision was announced by the Bank of Japan.
  • The central bank decided to keep the interest rates unchanged from -0.1%, which ignited a rally in the Japanese Yen.

Technical Analysis

The British Pound came under a lot of pressure against the Japanese yen after the BoJ interest rate decision. The GBPJPY pair traded down, and also broke a monster support around 149.20-40 levels to trade as low as 147.33.

GBPJPY

If looks like the pair may continue to trade down, and might even test the 147.00 support area in the short term.

Selling rallies can be considered as long as the pair is below the broken support area of 149.20.

BoJ Interest Rate Decision

Today, the BoJ Interest Rate Decision was announced by the Bank of Japan. The market was not expecting any change in the interest rates. The outcome was as forecasted, as the central bank kept the rates unchanged at -0.1%.

The report released by the bank stated that the “Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 80 trillion yen. With a view to encouraging a decline in interest rates across the entire yield curve, the Bank will conduct purchases in a flexible manner in accordance with financial market conditions. The average remaining maturity of the Bank’s JGB purchases will be about 7-12 years.”

Overall, the Japanese yen gained heavily and there are chances of more strength in the near term, meaning more losses for GBPJPY.

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