- GBP/JPY gained strong positive traction on Tuesday and shot to over one month tops.
- A modest USD pullback extended some support to the GBP and remained supportive.
- The risk-on mood undermined the safe-haven JPY and provided an additional boost.
A sudden pickup in demand for the British pound pushed the GBP/JPY cross to over one-month tops, around the 152.70 region during the first half of the European session.
A combination of factors assisted the GBP/JPY cross to gain strong positive traction on Tuesday and break through the 152.25-30 supply zone. As investors looked past the mixed UK jobs report, the sterling found some support from the emergence of some selling around the US dollar. On the other hand, receding safe-haven demand weighed on the Japanese yen and provided a goodish lift to the cross.
The UK Office for National Statistics reported that the number of people claiming unemployment-related benefits fell 58.6K in August as against 71.7K decline anticipated. The slight disappointment, however, was offset by the expected downtick in the unemployment rate to 4.6% during the three months to July. The data did little to impress the GBP bulls or provide any impetus to the GBP/JPY cross.
That said, some repositioning trade ahead of the US consumer inflation figures dragged the USD further away from the two-week tops touched on Monday. This, in turn, was seen as a key factor that benefitted the British pound. Apart from this, the underlying bullish sentiment in the financial markets undermined demand for traditional safe-haven currencies, including the JPY, and remained supportive of the GBP/JPY pair's goodish intraday positive move to the highest level since August 12.
With the latest leg up, the cross now seems to have confirmed a near-term bullish breakout and seems poised to appreciate further. Hence, a subsequent strength back towards reclaiming the 153.00 mark, en-route the 153.30 horizontal resistance, remains a distinct possibility.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'