GBP/JPY impressive 155 pip rally hits a wall at daily resistance

GBP/JPY off to an impressive start om the week so far.
Bulls have met a critical resistance area, but a new catalyst may have to wait until the end o the week in UK data.
Brexit is the rotting carcass in this rocket-ship.
Unless the USD and yen breakdown entirely on a surge in risk appetite, upside prospects are limited.

Ross J Burland FXStreet

GBP/JPY has been one of the best performing crosses, with the bulls rallying some 155 pips to a previous resistance level.

At the time of writing, GBP/JPY is trading at 135.81 having rallied from 134.33 the low to a high of 135.90.

Fundamentally, a risk-on tone at the start of the week has weakened the yen, although the US dollar has also been crumbling which has given rise to a bid on the pound.

Cable has eked out a 0.75% advance on the day so far despite worsening tones withing the Brexit debacle.

In the latest headlines, as reported by the UK's press, UK'S PM Boris Johnson "has been pushing for the UK to fully cut ties with the bloc without a deal, former President of the EU Commission, Jean-Claude Juncker has claimed, as negotiations between Britain and Brussels remain deadlocked."

However, it is worth noting that the pound is probably also benefitting from a robust euro as well.

More on that here: The Chart of the Week: EUR/USD to complete a reverse H&S prior to next leg higher?

And, in the same light, it is also worth considering the backdrop of a resilient equities space pertaining to vaccine hopes supporting optimism, weighing on both the DXY and the JXY, -0.24%.

S&P 500 Index Weekly Forecast: Nothing but blue skies from now on?

On the UK data front, June Retail Sales and July PMIs are both on Friday.

The UK exiting the lockdown measures could also be a supportive factor.

It should be noted that the changes in consumer spending behaviour and general social distancing will prevail for a long time to come yet.

GBP/JPY levels

Overview
Today last price	135.82
Today Daily Change	1.31
Today Daily Change %	0.97
Today daily open	134.51

Trends
Daily SMA20	134.04
Daily SMA50	133.8
Daily SMA100	133.55
Daily SMA200	137.71

Levels
Previous Daily High	134.91
Previous Daily Low	134.13
Previous Weekly High	135.49
Previous Weekly Low	133.99
Previous Monthly High	139.74
Previous Monthly Low	131.77
Daily Fibonacci 38.2%	134.43
Daily Fibonacci 61.8%	134.61
Daily Pivot Point S1	134.12
Daily Pivot Point S2	133.73
Daily Pivot Point S3	133.34
Daily Pivot Point R1	134.91
Daily Pivot Point R2	135.3
Daily Pivot Point R3	135.69

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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