GBP/JPY rebounds from 149.00, first gain in a week
The pound is rising against the yen for the first time in a week. While the pound remained steady, the Japanese yen lost momentum during the American session after the release of upbeat US economic data.
US reports sent US bonds lower (higher yields) weakening the demand of the yen and also offering support for a US dollar recovery. The Dollar Index dropped to 93.05 and then rose back to 93.25.
GBP/JPY finds support around 149.00
The pair bottomed earlier today at 149.02, the lowest level since September 15. Then, boosted by the slide of the yen, broke above 149.50 and moved toward 150.00. It printed a fresh daily high at 149.82 and at the moment of writing it was trading at 149.75/80, up 35 pips for the day.
The short-term trend still points to the downside. Although the area around 149.00 appears to be a strong support that contains the 20-day moving average. A daily close below would clear the way for a test of 147.75/80 (Jul highs).
On the upside, the key level to break could be seen at 150.40/50 (downtrend line from Sep highs). Above, the next resistance is 151.60 (Sep 27 & 28 high) followed by 152.25.
From a fundamental perspective, the pound is not as strong as it was weeks ago. The latest round of UK data lowered the expectations of a rate hike from the Bank of England. Also, it has been affected by Brexit concerns. At the same time, the yen lost strength amid risk appetite and higher yields, and limited the slide of GBP/JPY.
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.
