GBP/JPY Drops Below 158.50, Eyeing 50-DMA for Immediate Support
GBP/JPY Drops Below 158.50, Eyeing 50-DMA for Immediate Support
Bears strengthened their grip and extended the GBP/JPY
pair's downfall from day's peak of 159.84 to a fresh session low of
158.26 amid global risk-off trade and ongoing concerns over the 'Brexit'.
After rising to a three week high level of 161.63 on Thursday, the pair
reversed some of its weekly gains to close shy of 160.00 handle and
resumed its slide on Monday. The global risk-off sentiment dominated
investor sentiment on Monday, thus boosting the safe-haven appeal of the
Japanese currency.
Moreover, the latest UK Treasury Report raised further concerns over the
short-term impact of 'Brexit' on the UK economy and on the British
Pound. The report pointed to a potential fall of around 12-15% for the
Pound index in case of the UK’s depart from the EU.
The combination of global risk-off sentiment and looming 'Brexit'
concerns have been the key factors dragging the GBP/JPY pair's lower on
Monday. The pair has now dropped close towards testing its immediate
strong support near 50-day SMA, a level that would help traders to
determine the pair’s move for next few trading sessions.
Technical levels to watch
From current levels, 50-day SMA near 157.95-158.00 round figure mark
seems to extend some immediate support for the pair. Failure to hold
this immediate support, and a subsequent break below 20-day SMA support
near 157.60 region, has the potential to extend the pair's down-slide
further towards its next major support near 156.50-30 region.
Alternatively, a bounce off 50-day SMA support now seems to confront
immediate resistance near 158.70-75 region, which if conquered seems to
assist the pair back towards 160.00 psychological mark.
