GBP/JPY Reclaims 160.00 with Ease, Now Aiming 161.50

GBP/JPY Reclaims 160.00 with Ease, Now Aiming 161.50

24 May 2016, 14:10
Roberto Jacobs
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GBP/JPY Reclaims 160.00 with Ease, Now Aiming 161.50

The British Pound continues to gain traction against its Japanese counterpart, with the GBP/JPY pair surging past 160.00 handle with ease after BoE's testimony before Parliament's Treasury Committee.

The pair's recovery from 158.00 level gained momentum after the release of latest 'Brexit' poll results that showed overall lead for the 'Remain' camp. Adding to it, green tick across European equity markets dented demand for the perceived safe-haven currency, Japanese currency. GBP bulls got an additional boost after BOE MPC Annual Report indicated that UK inflation is likely to rise gradually through 2016, despite of the ongoing uncertainty surrounding 'Brexit', which could be cause for an economic slowdown and a sharp downfall for the British Pound.

The combination of developments resulted into a sharp surge for the GBP/JPY pair to currently trade at the high point of the day at 160.30.

Technical levels to watch

Given the intensity of the up-move and a sustained trade above 160.00 clearly suggests that the pair from is more likely to extend its upward trajectory back towards retesting last week's highs resistance near 161.60-65 region, also coinciding with 100-day SMA.

On the flip side, dip back below 160.00 handle might be bought into near 159.70 level. However, sustained weakness back below 159.70, leading to a break below 159.50 level, might increase the pair's vulnerability to drop back to 50-day SMA strong support near 158.00 round figure mark.


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