GBP/JPY working its way towards a test of the 200-day MA
The pound and the yen are on two opposite ends of the spectrum as November begins and the upside move in GBP/JPY very much reflects the sentiment seen over the past two days. For buyers, they’re very much just extending a bounce following support seen at the 76.4 retracement level at around 143.39.
But with risk sentiment turning on its head and the pound finding renewed optimism from a Brexit deal as well as flushing out shorts, the pair is now looking to move back to bullish territory once again.
A test of the 200-day MA (blue line) @ 147.48 beckons and as long as risk sentiment continues to stay positive ahead of US trading, this will be a key level to watch out for in the session to come.
Hold a break above that and price looks set to retest the September and October highs where the July high of 149.31 continues to put a cap on price action. I’d be looking towards breaking that for any further upside towards 150.00 and beyond to continue.
But for now, there’s nothing to suggest that the upside momentum should back down just yet until the 200-day MA is tested or unless the US jobs report later damages risk sentiment in markets.