GBP/JPY remains weak but above 150.00
|- Pound fails to recover ground against the yen.
- GBP/JPY correction capped, for the moment, above 150.00
The GBP/JPY pair is about to end the day unchanged, after hitting at 150.17, the lowest level in three and a half weeks.
The demand for the Japanese currency remained strong in the market. During the week it received a boost after the Bank of Japan reduced purchases of long-term Japanese bonds. On Thursday, a lower-than-expected reading in US PPI, pushed USD/JPY back to the downside and during the US session, it fell to test 111.00.
The pound fell yesterday across the board and continued to show some weakness today amid ongoing fears about the effects of Brexit on the UK economy.
GBP/JPY capped by 151.00
Two times during the day GBP/JPY tested the 151.00 region but failed to break higher. Both times the pair retreated aftewards to the 150.50 area. Price moved sideways all day consolidating after losing 300 pips in two days.
The negative momentum for the pound still prevails but the area above 150.00 is offering support. A break lower could open the doors to a bearish extension with an immediate target at 149.40 (Dec low).
The main trend continues to point to the upside but the current correction after another failure to make a clear break above 153.50, could signal that a short-term peak was reached last week at 153.63.
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