The pound strengthened against the dollar and euro but dropped against the yen as investors anticipated the Bank of Japan signaling an end to its easy monetary policy. The pound's largest one-day drop against the yen in five months occurred, while it remained steady against other major currencies. The pound's price action has also been influenced by expectations that the BoE will not cut rates until June, compared to the European Central Bank and the Federal Reserve in March. The Bank of Japan's potential policy change could create a risky situation, causing the yen to rise against other major currencies including the British pound.
‘Market participants will closely watch the BoE's post-meeting statement for insight into inflation, growth, and MPC members' voting decisions. The Bank of England is expected to keep interest rates stable at 5.25% but any surprise announcement will create volatility in the majority of the GBP pairs.’ said Antreas Themistokleous, an analyst at Exness.
From the technical point of view the price is trading just above the ¥182 price area which is also the 61.8% of the daily Fibonacci retracement level. The recent aggressive pullback has pushed the Stochastic oscillator in the extreme oversold levels and the price is also trading below the lower band of the Bollinger bands indicating the volatile status of the market at the time of this report being written. Despite the aggressive pullback though the faster moving average (50 days) is still trading above the slower (100 days) moving average indicating that the overall bullish momentum might still be in effect.
In the event of the price resumes the overall bullish trend then the first point of major resistance might be found around the ¥184-¥185 price area which consists of the 38.2% of the daily Fibonacci retracement level, the lower band of the Bollinger bands as well as the dynamic resistance area between the 50 and the 100 day moving averages.
‘Market participants will closely watch the BoE's post-meeting statement for insight into inflation, growth, and MPC members' voting decisions. The Bank of England is expected to keep interest rates stable at 5.25% but any surprise announcement will create volatility in the majority of the GBP pairs.’ said Antreas Themistokleous, an analyst at Exness.
From the technical point of view the price is trading just above the ¥182 price area which is also the 61.8% of the daily Fibonacci retracement level. The recent aggressive pullback has pushed the Stochastic oscillator in the extreme oversold levels and the price is also trading below the lower band of the Bollinger bands indicating the volatile status of the market at the time of this report being written. Despite the aggressive pullback though the faster moving average (50 days) is still trading above the slower (100 days) moving average indicating that the overall bullish momentum might still be in effect.
In the event of the price resumes the overall bullish trend then the first point of major resistance might be found around the ¥184-¥185 price area which consists of the 38.2% of the daily Fibonacci retracement level, the lower band of the Bollinger bands as well as the dynamic resistance area between the 50 and the 100 day moving averages.