• GBP/JPY gained strong positive traction on Monday and rallied around 200 pips from the daily swing low.
  • The BoJ cut its assessment for most regional economies, which weighed on the JPY and extended support.
  • Subdued USD price action benefitted the British pound and remained supportive of the strong momentum.


The GBP/JPY cross added to its strong intraday gains and surged to a two-week high, above mid-163.00s during the first half of the European session.

Following the modest bearish gap opening, the GBP/JPY cross caught aggressive bids on the first day of a new week and has now rallied around 100 pips from the daily low near the 161.60 region. The Japanese yen weakened across the board after the Bank of Japan cut its assessment for most regional economies. Adding to this, the BoJ Governor Haruhiko Kuroda warned of very high uncertainty over the fallout from the Ukraine crisis.

On the other hand, the British pound drew some support from subdued US dollar price action, weighed down by a goodish pickup in demand for the shared currency. The combination of supporting factors helped offset disappointing UK macro data, showing that the economic growth decelerated to 0.1% in February from the 0.8% previous. Moreover, the UK Manufacturing and Industrial Production unexpectedly contracted during the reported month.

The strong intraday surge took along some short-term trading stops placed near the 162.35-162.40 zone - a resistance marked by the top end of a three-day-old consolidation range. Hence, the momentum could further be attributed to some technical buying. A subsequent move beyond the 163.00 mark might have already set the stage for additional gains amid caution around the BoJ's intervention to defend its 0.25% yield target.

Technical levels to watch

GBP/JPY

Overview
Today last price 163.6
Today Daily Change 1.77
Today Daily Change % 1.09
Today daily open 161.83
 
Trends
Daily SMA20 159.44
Daily SMA50 156.74
Daily SMA100 155.1
Daily SMA200 153.87
 
Levels
Previous Daily High 162.37
Previous Daily Low 161.65
Previous Weekly High 162.37
Previous Weekly Low 160.28
Previous Monthly High 164.64
Previous Monthly Low 150.99
Daily Fibonacci 38.2% 161.92
Daily Fibonacci 61.8% 162.09
Daily Pivot Point S1 161.53
Daily Pivot Point S2 161.23
Daily Pivot Point S3 160.82
Daily Pivot Point R1 162.25
Daily Pivot Point R2 162.66
Daily Pivot Point R3 162.96

 

 

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