GBP/JPY rejected near weekly high, back below 128.00 handle

Haresh Menghani FXStreet

The GBP/JPY cross failed to sustain its move above 20-day SMA and is now extending its reversal further below 128.00 handle.

Currently trading around 127.70 region, the cross came under renewed selling pressure amid the prevalent uncertainty over a possible 'hard Brexit'. Meanwhile, a cautious sentiment surrounding European equity markets is also underpinning the Japanese Yen's safe-haven appeal and contributing to the pair's reversal from the vicinity of weekly highs touched on Thursday. Thursday's better-than-expected UK growth numbers lifted the cross beyond 128.00 handle to the highest level since Oct. 10.

In absence of any major releases from UK, focus would be on US economic docket, featuring the advance release of Q3 GDP print, which would provide fresh impetus for both, the Japanese Yen and the British Pound, eventually driving the GBP/JPY cross.

Technical levels to watch

Immediate downside support is pegged at 127.50-45 area, below which the cross is likely to accelerate the slide immediately towards 127.00 handle before eventually dropping to an important horizontal support near 126.60-55 region.

On the upside, sustained move above 20-day SMA resistance near 128.00 region could trigger a short-covering rally initially towards 128.60 (Oct. 10), which could further get extended towards 129.50 strong resistance with 129.00 round figure mark acting as intermediate resistance.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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