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GBP/JPY Price Analysis: Traders Watch 188.00 as the Rally Extends to Three Days
The GBP/JPY pair increases for the third day in a row, bolstered by robust UK economic indicators and lacklustre trading activity. The recovery of the GBP/JPY pair from a three-week low places them above 187.00, with a prospective target of 188.00. Tenkan-Sen (186.37) provides immediate support for downside risks; a decline below 187.00 could result in additional declines.
On Thursday, the Pound Sterling (GBP) maintained its three-day winning streak against the Japanese yen (JPY) on the strength of positive economic data from the United Kingdom. This, coupled with the lack of liquidity caused by the holidays in Japan and the United States, maintains the advantage of GBP purchasers. As of this writing, the GBP/JPY exchange rate is 187.50.
The European equity market exhibited a positive sentiment. According to S&P Global, business activity in the United Kingdom has increased following three consecutive months of contraction. However, the Manufacturing PMI index experienced its sixth consecutive month of contraction, albeit it is approaching the threshold of 50 for expansion or contraction.
The GBP/JPY experienced a technical recovery subsequent to its three-week low of 184.46, as evidenced by the daily chart. As the price rebounded at the Kijun-Sen at 184.52 and broke north at the Tenkan-Sen at 186.37, purchasers stepped in. The pair must reclaim the 188.00 level, then the year-to-date (YTD) high of 188.28, in order to solidify the uptrend towards the 190.00 level and signal a bullish continuation.
Conversely, should GBP/JPY fall below 187.00, the Tenkan-Sen at 186.37 would serve as the initial support prior to a decline towards 186.00. There are still downside risks below that level, with the Senkou Span A at 185.44 serving as the next support.
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