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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends sideways grind below 1.0900
EUR/USD stays in a consolidation phase below 1.0900 following the previous week's rally. In the absence of high-tier data releases, the US Dollar stays resilient against its rivals as investors scrutinize comments from central bank officials.
Gold retreated from record highs, maintains the upward bias
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
GBP/USD holds steady near 1.2700, Fedspeak in focus
GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground, while market participants assess remarks from central bank officials ahead of this week's key events.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.