Market Analysis – December 12
The GBP/JPY market has made notable progress between last week and this week, largely due to the continued weakness of the Japanese yen. However, toward the end of the week, the market began consolidating above 208. This may be linked to a potential intervention by the Bank of Japan (BoJ) aimed at supporting the yen.
As traders and analysts anticipate a possible shift toward a more hawkish monetary policy, demand for the Japanese yen has increased. This has caused the market to strengthen against the GBP, slowing the bullish momentum.
The candlestick representing today’s trading session is a long-legged doji. This indicates that GBP/JPY experienced significant movement during the day but was unable to establish a clear directional bias. It appears the market may close near its opening price, reflecting trader indecision.
Considering the indicators, bulls still seem to have the upper hand, as price action remains above the 20-day moving average. The market may continue to hold above the 208 level into next week.
GBP/JPY Short-Term Trend: Indecision
The GBP/JPY market is clearly consolidating above the 208 price level. The Bollinger Bands are now converging around the horizontally moving price action—a classic volatility squeeze. This could signal that the market is preparing for a major move, either to the upside or the downside.
However, recent market information indicates signs of bullish exhaustion, which may create room for a notable correction.
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