GBP/JPY on track to erase Brexit referendum losses

Matías Salord FXStreet

GBP/JPY is posting strong gains for a second day in-a-row and headed toward the highest close since the Brexit referendum. During the American session, the pair rose further after a BBC report mentioned that PM May will announce tomorrow a proposal of a transitional deal with the European Union.

GBP/JPY unstoppable breaks medium-term resistance

The pair confirmed today the break of the 151.70 resistance area and recently peaked at 152.83. It is trading just 200 pips below the level it opened the day of the Brexit referendum (June 23, 2016).

Earlier today, the pair received a boost after the decision of the Bank of Japan to maintain the status quo on monetary policy. One member voted to increase stimulus while Governor Kuroda showed readiness to do more in order to reach the 2% inflation target. The Yen weakened and added more fuel to the GBP/JPY rally.

BOJ keeps economic assessment unchanged

The pair has now risen more than a thousand pips in September. The change in the expectations about a rate hike from the Bank of England has been the main driver while the decline of the yen helped.

Despite the strong figures of the rally, the bullish momentum remains strong and so far, no signals of a potential correction are seen.

On Friday, the key event for the pair will be Theresa May’s speech on Brexit.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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