On Tuesday, the Pound strengthened against the Yen. The British currency was supported by Bank of England officials’ commentaries that noted an interest rate hike should come sooner than earlier thought. The decision, as was explained in the commentary, based on a need for the economy for a gradual rate increase after a long period of low interest rates.
In addition, the Yen was pressured by the publication of poor trade balance statistics from Japan. The Japanese Export grew by only 0.6%, against a 3.1% growth in the previous month and forecasted 3.4% increase, while the Trade Balance deficit amounted to 114.5 billion Yen.
Support and resistance
Bollinger Bands on the daily chart is moving up, while the price range is narrowing. MACD is growing and giving a strong buy signal. Stochastic reached the overbought zone and turning sideways.
The indicators recommend waiting for clearer trading signals.
Support levels: 184.81 (9 October high), 184.17, 183.32, 182.46, 182.00 (13 October lows), 181.37, 180.39 (7 September low), 180.00.
Resistance levels: 185.54 (20 October high), 186.26, 187.32 (21 September high), 188.26 (17 September high), 189.95 (25 August high), 190.97.
Long positions can be opened after the breakout of the level of 185.54 with the target at 187.00 and stop-loss at 185.00. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 185.54 with the target at 183.50 and stop-loss at 186.00. Validity – 2-3 days.