GBPJPY on Watch

Price action in GBJPY is lookinginteresting here. The pair has been grinding higher this year within a broadbullish channel. The rally has recently stalled into the 168.39 level, however,with price pulling back as deep as the 160 region. However, this area has actedas strong support for pair and, with the bull channel still intact, price nowlooks to be sitting in a consolidation pattern (triangle), suggesting room fora fresh topside break in the near term. Bulls can look for a break above 163.18targeting a move back up to the year’s highs around 168.39. The risk, ofcourse, is that we break lower from the current pattern, in which case I willreassess.

Keep An Eye On

The current risk-off tone toglobal markets is favouring JPY currently via enhanced safe-haven demand.However, should this dynamic reverse at any point, we can expect the pair torally. Additionally, the September BOE meeting is widely expected to see thebank announce further tightening measures to counteract record high inflationin the UK last month. With the BOJ firmly committed to maintaining its easingstance, this creates plenty of policy divergence to help drive GBPJPY highsagain.