GBP/JPY slides to yearly lows on persistent geopolitical tensions

Haresh Menghani FXStreet

The GBP/JPY cross maintained its offered tone for the fourth consecutive session and refreshed yearly lows to currently trade around 136.20-10 band.

Spot extended its breakdown momentum below the very important 200-day SMA and dropped to its lowest level since Nov. 18 amid prevalent risk-off environment, which tends to boost demand for traditional safe-haven assets - like the Japanese Yen.

Friday's comments from N. Korean foreign minister, who showed readiness for a war in case of if US chose to provoke, added fuel to the ongoing geopolitical tensions and has been a key factor benefitting the Japanese Yen and weighing on the cross.

• N. Korea ForeignMin: ‘We will go to war’ if US chooses to provoke – AP

With global markets closed in observance of Good Friday, the cross remains at the mercy of broader market risk sentiment amid lack of any fresh fundamental drivers, in-terms of any major market moving economic releases.

Technical levels to watch

From current level, the 136.00 handle is likely to protect immediate downside, below which the cross is likely to accelerate the slide towards 135.70-65 intermediate support ahead of the 135.00 psychological mark.

On the upside, momentum above 136.60-65 area (session tops) now seems to confront strong resistance at 200-day SMA near the 137.00 handle, which if conquered might trigger a short-covering rally towards 138.00 mark with some intermediate resistance near 137.70-75 zone.

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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