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GBP/JPY Testing Resistance

The GBP/JPY continues to consolidate. However, it is now testing the a falling resistance that goes back to December. 

(GBP/JPY 4H Chart)

Above the falling resistance resistance, there is still a wide range between 171.20 and 171.90 that contain the consolidation high for the past 2.5 weeks. 


Stochastic was at 20 and RSI at 40 before the rally. You know I like to look for this S20-R40 combination after a bull run, which the GBP/JPY had to start February. It is showing S80-R60 combination now, as we get ready for the US session. This signal differs from the S20-R40 because there is no prevailing downswing here. The market since February is bullish to neutral, so at most the neutral component might provide some bearishness in the form of resistance and overbought conditions in the 4H chart.

The BoE meeting tomorrow will be a risk event for the GBP, but to be honest, I don't expect too much from it. It is likely to maintain the current interest rate and pace of asset purchase program.