GBP/JPY Signal Today - 5/11: GBP Consolidates Vs JPY (Chart)

(MENAFN- Daily Forex) Potential signal:

I'm a buyer of this pair and have no interest in selling it. There are 2 scenarios that I see offering an entry into this pair. If we pull back to the ¥195 level, I'm a buyer. I would have a stop loss at the ¥192.50 level, and then would aim for a move to the ¥200 level. On the other hand, if we rally and break above the ¥200 level, then I would have a stop loss at the ¥198 level, and simply hang onto the pair for a move to the ¥206 level.

• In my daily analysis of the British pound against the Japanese yen, I noticed that we are in the midst of a major consolidation area.
• This of course isn't surprising, because we do have an interest rate decision from the Bank of England this week, and that of course will have a major influence on where we go next.
• Nonetheless, I think we got a situation where the interest rate differential will continue to favor the British pound into the foreseeable future, so I still find this a market that I like to the upside.

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The technical analysis for the GBP/JPY currency pair is somewhat neutral over the last couple of days, but I do see a significant amount of support near the ¥195 level, which is an area that has been noisy for some time. The 50 Day EMA is racing toward that area, and I think that is something that should be noted as it is a large indication of the overall trend. In other words, think that will be a lot of buyers there waiting to pick this market up, assuming that risk appetite doesn't get eviscerated, nor does the Bank of England lose its mind somehow.

On the upside, I see the ¥200 level as a major barrier, but eventually we should break above it. Quite frankly, you get paid to hang on to this pair, much like my USD/JPY trade in my personal account, you can just simply hold onto it until something changes. I get paid at the end of every day to hold that trade, it would be just as comfortable with this one, although I'm the first to recognize that the Bank of England interest rate decision happening on Thursday isn't the ideal problem to deal with.

EURUSD Chart by TradingView

At this point in time, I think you get a situation where it's likely that any selloff will result in some type of buying opportunity, and that's exactly how I would approach this market, given the chance. Between now and then, it's just simply a matter of collecting swaps.

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