GBP/JPY: bulls back in charge, not just Brexit, supported by DXY

Ross J Burland FXStreet

GBP/JPY has made a come back with action through GBP/USD and the media's interpretation of the outcome of yesterday's news on PM's May's "hard-Brexit" supposed U-turn.

GBP rallied on the back of investors following misleading headlines around UK parliament on Brexit explained in the following article: GBP/USD: "dust-masks' at the ready, very volatile on Brexit frenzy

GBP/JPY has recovered from the 124.82 lows and reached a high of 127.71 in the U.S. shift today, perhaps as the markets feel that, not only a Fed hike is on the cards for December and DXY on the rampage, albeit stalling ahead of the FOMC minutes, but also the BoJ will be ramping up JGB buying in an environment of rising global yields and higher oil.

"Comments from BOE MPC member Michael Saunders garnered some attention yesterday with his view that given the UK’s current account deficit that he would not be surprised if the pound fell further, but added he was “fairly agnostic” over whether further selling is likely. This shouldn’t surprise anyone and an expression of concern by a key policymaker would do more harm than good in an attempt to stabilise the pound."

GBP/JPY levels

Spot is presently trading at 127.58, and next resistance can be seen at 127.62 (Daily Classic R1), 127.72 (Daily High), 127.75 (Weekly Classic PP), 128.18 (Hourly 100 SMA) and 128.39 (Yesterday's High).

Next support to the downside can be found at 127.02 (Hourly 20 EMA), 126.23 (Daily Classic PP), 125.47 (Monthly Low), 125.47 (Weekly Low) and 125.47 (Annual Low).

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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