GBP/JPY finds support ahead of 145, struggles to recover amid flight-to-safety
- Major global equity indexes record losses on Monday.
- JPY finds demand as a safe-haven.
- GBP/JPY erases last week's modest gains.
After making a decisive recovery on Friday, the GBP/JPY pair recorded a 50-pip gain for the week but failed to preserve its momentum on Monday as the risk-off mood allowed safe-havens to find demand. As of writing, the pair was trading at 145.35, losing 0.65%, or nearly 100 pips, on the day.
Ongoing political woes in Germany and concerns over the Trump administration's trade policy continue to push investors away from rick-carrying assets. Earlier today, the U.S. Commerce Secretary Wilbur Ross stated that President Trump wouldn't back away on his trade decisions even if Wall Street continued to suffer from them. At the moment, the Dow Jones Industrial Average and the S&P 500 indexes were both down around 0.35% on the day while the UK's FTSE was down 1% in the last hour of the European session.
Meanwhile, on the Brexit front, the UK officials are said to have come up with a new proposal on post-Brexit customs model and will start discussing them PM Theresa May on Friday, as reported by BBC.
Technical outlook
With today's fall, the RSI indicator on the daily chart started edging lower toward the 30 handle, suggesting that the bearish momentum is building up. On the downside, the pair could face the first technical support at 145.15 (daily low) ahead of 144.65 (Jun. 25 low) and 143.75 (Jun. 28 low). Technical resistances align at 146 (psychological level), 146.80 (50-DMA) and 147.80 (Jun. 14 high).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
