GBP/JPY climbs back above 155.00 mark after BoE Haldane's comments

GBP/JPY built on the previous day’s bounce from weekly lows, near mid-154.00s.
Hawkish remarks by BoE’s Haldane provided a modest lift to the British pound.
Brexit Jitter, COVID-19 woes, the cautious mood might cap gains for the cross.

Haresh Menghani FXStreet

The GBP/JPY cross edged higher during the early European session and refreshed daily tops, around the 155.15 region in the last hour, albeit lacked follow-through.

The cross built on the previous day's goodish bounce of around 50 pips from the vicinity of weekly lows, around the 154.55 region and gained some follow-through traction on Wednesday. The uptick was exclusively sponsored by a modest pickup in demand for the British pound, which got an additional boost after the Bank of England Chief Economist, Andy Haldane's hawkish comments.

Haldane noted that the UK economy is going gang-busters and there may be the need to start turning off the stimulus tap. We need not become too dependent on monetary medicine and could ultimately start to turn QE around. Already seeing some pretty punchy pressures on prices. If pay and costs are picking up, inflation on the high street isn't very far behind, Haldane added further.

The upside, however, is likely to remain capped, at least for the time being. EU-UK collision over Norther Ireland protocol and talks that further easing of lockdown measures in the UK may be postponed could continue to act as a headwind for the sterling. This, along with a cautious mood, extended some support to the safe-haven Japanese yen and might hold bulls from placing aggressive bets.

It is worth reporting the European Union warned of a swift and firm action if the UK fails to honour its commitments under the divorce deal. The two sides are due to hold talks on Thursday to resolve differences over the deal. There are also speculations that the UK may delay plans to end restrictions fully on June 21 in light of the spread of the so-called Delta variant.

From a technical perspective, the recent price action constitutes the formation of a bullish flag pattern on short-term charts. This, in turn, supports prospects for additional gains. That said, it will be prudent to wait for some strong follow-through buying before positioning for any further appreciating move amid absent relevant market moving economic releases.

Technical levels to watch

GBP/JPY

Overview
Today last price	155.11
Today Daily Change	0.11
Today Daily Change %	0.07
Today daily open	155

Trends
Daily SMA20	154.7
Daily SMA50	152.68
Daily SMA100	150.09
Daily SMA200	144.11

Levels
Previous Daily High	155.09
Previous Daily Low	154.56
Previous Weekly High	155.94
Previous Weekly Low	154.82
Previous Monthly High	156.08
Previous Monthly Low	150.93
Daily Fibonacci 38.2%	154.89
Daily Fibonacci 61.8%	154.76
Daily Pivot Point S1	154.67
Daily Pivot Point S2	154.35
Daily Pivot Point S3	154.14
Daily Pivot Point R1	155.21
Daily Pivot Point R2	155.42
Daily Pivot Point R3	155.74

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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