GBP/JPY grinds higher around 161.60 during early Monday, struggles to extend intraday gains amid dicey markets. In addition to the sluggish sentiment, geopolitical fears emanating from China and North Korea, as well as Brexit woes, also probe the cross-currency buyers. Even so, upbeat US Treasury bond yields and easing hawkish bias about the Bank of Japan (BoJ) seem to put a floor under the Yen price.

On the contrary, hawkish bias from the Bank of Japan’s (BoJ) new policy board seemed to have faded of late as the key diplomat from Tokyo, including Japan PM Kishida, indirectly unveiled their expectations of BoJ’s easy money policy’s extension.

GBP/JPY remains bullish between the 21-day and 200-day Exponential Moving Average (EMA), currently around 160.30 and 161.85 at the latest.

In the meantime, the GBP/JPY 1-hour chart suggests the pair as neutral biased, though slightly tilted downwards, as a bearish flag emerged. In addition, the Relative Strength Index (RSI) turned bearish, while the Rate of Change (RoC) depicted that buying pressure waned.

In the 4h chart we can clearly see a bullish key reversal pattern. A bullish Key reversal is a price candlestick that makes a new low for the current downtrend but closes above the previous bar's close. The 4h timeframe is also aligned with the daily timeframe. Targets are 161.50 and if it breaks we should see 162.20. We can clearly see a buy signal in the chart around 161.00 Volatility is high in this pair and the bulls are leading the way at this moment.

GBPJPY can take an exit from correction anytime.

Feb 20 2023

Stop Loss -0.68%

Holding time 9hr

161.720

Entry price

162.813

Stop loss price