Despite recent gains of the GBP/JPY, reaching towards 152.82, the highest for this pair in one month, the bullish bounce still needs more stimulates to confirm the strength of the bullish trend. With liquidity back to the markets after the holiday break, the GBP/JPY found an opportunity to achieve more gains reaching towards the location of the resistance that the pair tried to break through a number of times to establish a stronger bullish opportunity. The pair is still facing difficulty in achieving stronger gains with weak momentum. It is clear on the GBP/JPY chart that the pair is moving in tight ranges with slight bullish bias awaiting stronger catalysts for the GBP. The GBP/JPY, is considered the least performing among the JPY’s pairs, as after the US tax cut bill passage announcement, there was an increase move towards risker assets and increased pressure on the JPY, and the JPY’s pairs found a better chance to achieve stronger gains, however, the pair’s gains didn’t go beyond 152.00, which is considered a strong evidence that the GBP is still facing strong pressures from the BREXIT negotiations with daily updates from both parties.
The Bank of Japan maintained its monetary policy as is as expected, and the announcement from Bank of England about the monetary policy had no strong reactions on the pound’s directions against other majors. The GBP movement and performance is still based on the BREXIT negotiations updates, as well as the market reactions towards renewed international geopolitical fears at any time, as the JPY is one of the most important save heavens.
The GBP/JPY will have a strong bullish move, as shown on the weekly chart, if it moved towards resistance at 153.40, which could support a move towards the next psychological peak at 155.00. On the bearish side, the nearest support levels are located at 151.70, 151.00 and 150.00, and the last of which will end the current pair’s hopes to achieve more gains, and will reconfirm the bearish strength.
On the economic data front today:
There are no important data expected from Japan, and it will focus on the Construction PMI from the UK. The pair will be awaiting updates on the path of BREXIT negotiations, and will focus on the move towards save heaves led by the JPY in case of any renewed international geopolitical fears at any time.