GBP/JPY Analysis – Safe Or Will Prices Fall Again?

<p>&nbsp;The price chart of the GBP/JPY currency pair showed a decline to last week's recent lows, but did not extend the fall at the end of the week.</p><p><br /></p><p>Why does that happen?</p><p><br /></p><p>This was driven by the market's reaction to the results of policy meetings by both the central banks of Japan (BOJ) and England (BOE).</p><p><br /></p><p>Last week, the BOE surprised the market by not raising interest rates which remained at 5.25%, ending 14 consecutive rate hikes.</p><p><br /></p><p>The Pound weakened significantly after the meeting's decision on Thursday.</p><p><br /></p><p>The next day on Friday, the BOJ came out with unchanged results with rates kept low at -0.10% and policy remaining loose.</p><p><br /></p><p>Thus, the Yen which also weakened again offset the price drop on the GBP/JPY chart before that.</p><p><br /></p><p>At the beginning of last week, the price hovered around the 183.300 level before plunging to 181.00 following the reaction to the BOE meeting.</p><p><br /></p><p>However, the fall did not continue as the weakening Yen subsequently lifted the price slightly to around 182.00.</p><p><br /></p><p><br /></p><p>However, the price still shows a bearish movement when the Moving Average 50 (MA50) barrier on the 1-hour time frame on the chart fails to be overcome.</p><p><br /></p><p>Continuing until the opening trade earlier this week, the price moved slowly below the 182.00 zone and was also hindered by the MA50.</p><p><br /></p><p>Market analysts expect the price trend to be more bearish with the probability of new lows being recorded.</p><p><br /></p><p>If the price drops past 181.00, a further drop in price can be targeted to reach around the 179.00 zone.</p><p><br /></p><p>However, if the Yen weakens against the Pound, the price could rise again to trade above the 182.00 level.</p><p><br /></p><p>If the resistance is broken, the price will go back to the 183,300 level that was the focus of last week before the price plunge.</p>