GBP/JPY - Sideways churn continues even as May embarks on UK tour
The GBP/JPY cross shows little anxiety or excitement even as UK PM Theresa May embarks on a UK tour to galvanize Brexit support.
The pair has been restricted largely to a narrow range of 140.60-138.00 since last few days. The range remains intact in Asia.
Is the bubble in Pound about to pop?
Cable defended 1.21 levels during the recent bout of weakness, thus leading to the higher lows formation on the weekly chart. That seems to have triggered speculation of a major trend reversal in the pond.
However, it is too early to call a bottom as the significant majority in the market believes pulling of the Article 50 trigger would end up popping the bubble in the GBP. Moreover, the negotiation process brings with it a lot of uncertainty and risk of Hard Brexit and that could weigh over the British Pound.
GBP/JPY Technical Levels
A break above 140.30 (resistance offered by Dec 15 high and Jan 27 high) would expose 140.76 (50-DMA) and 141.00 (zero levels). On the other hand, a breakdown of support at 138.56 (Mar 16 low) could yield a sell-off to 138.00 (zero figure) and 137.64 (200-DMA).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
