- GBP/JPY rebounds over 50 pips from daily swing lows and moves back closer to daily tops.
- The latest optimism over Brexit talks underpinned the sterling and remained supportive.
- The anti-risk flow benefitted the safe-haven JPY and kept a lid on any meaningful upside.
The GBP/JPY cross quickly reversed an intraday dip to the 139.35 region and has now moved back closer to the top end of its daily trading range.
The British pound remained well supported by improving sentiment on Brexit trade talks, which, in turn, was seen as one of the key factors behind the GBP/JPY pair's goodish intraday bounce of over 50 pips.
Britain's chief negotiator David Frost said on Thursday that a Brexit agreement can be reached in September. This comes ahead of the next round of talks about the future relationship, set to commence in Brussels on August 18, and suggested that the two sides remain committed to reaching a deal.
However, a turnaround in the global risk sentiment, as depicted by a sharp fall in the equity markets, underpinned the Japanese yen's safe-haven demand and kept a lid on any further gains for the GBP/JPY cross.
Even from a technical perspective, the cross has been struggling to move beyond an upward sloping channel. This makes it prudent to wait for a sustained move beyond the 140.00 psychological mark before positioning for any further near-term appreciating move.
Meanwhile, the fact that the cross has managed to find acceptance above 100-week SMA supports prospects for additional gains. Nevertheless, the cross remains on track to end the week on a high note and register gains for the third week in the previous four.
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
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.