GBP/JPY Price Analysis: Jumps to near 182.00 as investors digest high odds of BoJ’s intervention

• GBP/JPY climbs to near 182.00 as the impact of expectations of BoJ’s intervention starts fading.
• BoJ’s money market data cleared that Tuesday’s flash crash move was not the by-product of stealth intervention.
• GBP/JPY delivers a breakout of the Symmetrical Triangle chart pattern.

The GBP/JPY pair delivered a sharp upside move to near 182.00 in the London session. The asset picks strength as the market sentiment improves. The cross has extended its upside significantly after Tuesday’s ‘flash crash’, which resulted in a huge buying for the Japanese Yen.

Earlier, investors misunderstood the crack in the GBP/JPY pair as a stealth intervention by the Bank of Japan (BoJ) but the BoJ’s money market data showed that it was not the by-product of official intervention. This weakened the appeal for the Japanese Yen again as the BoJ is expected to maintain the expansionary policy stance for a longer period.

Meanwhile, the appeal for the Pound Sterling improves as Bank of England (BoE) Governor Andrew Bailey sees inflation easing to 5% or below by the year-end. If the BoE manages to do so, the promise made by the UK Prime Minister of halving the inflation to 5.2% by the end of 2023 would be fulfilled.

GBP/JPY delivers a breakout of the Symmetrical Triangle chart pattern on an hourly scale, which results in wider ticks and heavy volume. The 20-period Exponential Moving Average (EMA) around 181.40 will continue to provide support to the Pound Sterling bulls.

The Relative Strength Index (RSI) (14) shifts into the bullish range of 60.00-80.00, which indicates that the bullish impulse is already active.

A mean-reversion move to near October 3 high at 181.38 would be a buying opportunity for the market participants. This would drive the asset toward September 28 high at 182.43 followed by September 29 high around 183.00.

In an alternate scenario, a breakdown below October 4 low at 179.47 would expose the asset to October 3 low at 178.00.

GBP/JPY hourly chart