GBP/JPY volatile on Brexit talks: now jumps a hundred pips and hits weekly highs

Matías Salord FXStreet

The pound jumped following a report that mentioned an offer from the European Union to the United Kingdom on a two-year transition period. Before that, GBP was the worst performer in the market and in a few minutes erased all losses.

EU’s Barnier could offer UK 2-year transition stay in EU market - Handelsblatt

GBP/JPY bottomed earlier at 147.26, the lowest since Monday, after Michel Barnier, EU's chief Brexit negotiator said that talks regarding the “divorce bill” reached a “deadlock”. The pair then bounced modesty to the upside and during the last hour gained more than a hundred pips, on the report about the EU offer. It even reached a fresh weekly high at 149.08.

The pair so far is being unable to consolidate ton top of 149.00 but the intraday tone has changed dramatically, again, now favoring the upside. Volatility remains elevated on Pound’s crosses amid Brexit talks. With a round of negotiations on its ways, the currency is likely to be exposed to comments from officials, rumors, and speculations.

UK ForMin Johnson: Very optimistic about Brexit talks and the progress that can be made

Levels to watch

To the upside, resistance levels might be located at 149.00/10 (Oct 12 high / Oct 4 low), 149.45 (Oct 5 high), 149.95 (Oct 4 high / Sep 26 low). On the flip side, support could be seen at 147.80 (Oct 11 low), followed by 147.25 (daily low) and 146.90 (Oct 9 low).

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.

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