GBP/JPY plunges to 5-week lows as Yen continues to soar
|Yen continues to soar across the board, with the GBP/JPY cross reversing all of its post-BOJ recovery to 133.26 and extended its bearish move for the fifth consecutive session.
The BOJ's decision to leave interest rates unchanged at -0.1% seems to have disappointed few market participants expecting the central bank to take rates further into negative territory. The disappointment seems to have forced investors to unwind bearish Yen bets and is exerting intense selling pressure around the GBP/JPY cross.
Meanwhile, a softer tone around the GBP/USD major provided little incentive for bulls and the cross tumbled to the lowest level since August 19.
Next in focus would be the Fed monetary policy decision, which would determine further demand for both the Japanese Yen and the British Pound, eventually providing fresh impetus for GBP/JPY traders.
Technical levels to watch
From current levels, 130.50-60 area seems to act as immediate support, which if broken would turn the cross vulnerable to break below 130.00 psychological mark support and head towards testing its next major support near 129.20 area.
On the flip side, recovery back above 131.00 handle, leading to a subsequent move above 131.30 resistance, might trigger a near-term short-covering bounce towards 132.00 round figure mark.
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