The pound sterling is moving in a positive direction against the yen. The pair is up about 3.5% from early November lows, although the rally has stalled this week, with the bulls failing to find a follow-through beyond the 2076.35 area.
The underlying context was mixed. On the one hand, investors were encouraged by the UK Budget’s tax hike and positive services activity numbers released on Wednesday.
On the other hand, repeated warnings by Japanese officials against excessive yen weakness have kept yen sellers on alert. Earlier today, it was Cabinet Secretary Minoru Kihara who pledged to take appropriate steps to protect the yen from excessive and disorderly fluctuations.
Technical Analysis: GBP/JPY is forming an ascending triangle below 207.35
The recent price action shows that the pair is moving within an ascending triangle, with its peak located at the mentioned 207.35 level. Triangles are often continuation patterns, and in this case, they indicate a bullish outcome.
On the upside, above the mentioned 207.35 level, the target is the 2024 high, which coincides with the 127.2% Fibonacci extension of the November 20-26 trend at the 208.15 area. Furthermore, the 161.8% extension of the same cycle is located at 209.15. The measured target for the triangle is at 210.30.
On the other hand, a bearish reaction will find support at the base of the triangle, now at the 205.85 area ahead of the week’s low of 205.20 and the November 21 low of 204.30.
The price of the Japanese yen this week
The table below shows the percentage change of the Japanese Yen (JPY) against the major currencies listed this week. The Japanese yen was the strongest against the US dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.48% | -0.83% | -0.79% | -0.23% | -1.19% | -0.69% | -0.03% | |
| euro | 0.48% | -0.35% | -0.32% | 0.25% | -0.71% | -0.21% | 0.45% | |
| GBP | 0.83% | 0.35% | 0.31% | 0.61% | -0.36% | 0.14% | 0.80% | |
| JPY | 0.79% | 0.32% | -0.31% | 0.56% | -0.42% | 0.09% | 0.75% | |
| Canadian | 0.23% | -0.25% | -0.61% | -0.56% | -1.01% | -0.45% | 0.19% | |
| Australian dollar | 1.19% | 0.71% | 0.36% | 0.42% | 1.01% | 0.51% | 1.17% | |
| New Zealand dollar | 0.69% | 0.21% | -0.14% | -0.09% | 0.45% | -0.51% | 0.66% | |
| Swiss franc | 0.03% | -0.45% | -0.80% | -0.75% | -0.19% | -1.17% | -0.66% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent the Japanese Yen (base)/US Dollar (quote).
