GBP/JPY extends rebound from 200-DMA, surges through 141.00 handle

Haresh Menghani FXStreet

The GBP/JPY cross staged a goodish recovery on Monday and has managed to reverse majority of Friday's disappointing UK retail sales-led slide to the very important 200-day SMA support.

Currently trading back above 141.00 handle, testing session peaks, the cross caught fresh bids after disappointing Japanese trade balance data, which helped the cross to build on Friday's rebound from sub-140.00 level (200-day SMA support). Adding to this, positive trading sentiment around equity markets further weighed on the Japanese Yen's safe-haven demand and is supportive of the pair's recovery on Monday.

Meanwhile, a strong recovery in the GBP/USD major was also seen collaborating to the strong bid tone surrounding the GBP/JPY cross. Moreover, a fresh wave of short-covering, in wake of the ongoing rebound from 200-day SMA, could also be attributed to the pair's strong up-move in the past hour or so.

In absence of any fresh fundamental trigger, in-terms of economic releases, market focus would be on any fresh news / developments surrounding the House of Lords debate on the Brexit bill, scheduled to start from 3pm GMT.

Technical levels to watch

Immediate resistance is pegged near 141.35-40 region above which the recovery trend could get extended towards 142.40 horizontal hurdle with some intermediate resistance near 142.00 round figure mark.

On the downside, 140.60-55 region now becomes immediate support to defend, which if broken could accelerate the slide back below 140.00 psychological mark towards retesting 200-day SMA support near 139.50 region.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 141.18

67% Bullish
17% Bearish
17% Sideways

Bias Bullish

1 Month

Avg Forecast 139.38

20% Bullish
40% Bearish
40% Sideways

Bias Bearish

1 Quarter

Avg Forecast 135.90

17% Bullish
67% Bearish
17% Sideways

Bias Bearish

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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