- GBP/JPY gained strong follow-through traction for the second straight session on Thursday.
- The improving COVID-19 situation in the UK continued acting as a tailwind for the sterling.
- Investors now look forward to the latest BoE policy decision for a fresh directional impetus.
The GBP/JPY cross held on to its strong intraday gains through the first half of the European session and was last seen trading near three-day tops, just above mid-152.00s.
The cross built on this week's goodish rebound from the vicinity of the 151.00 mark and gained some follow-through traction for the second consecutive session on Thursday. A combination of factors continued acting as a tailwind for the sterling.
The European Union had decided to pause legal proceedings against Britain over the Northern Ireland protocol dispute. Apart from this, the declining trend of new COVID-19 cases in the UK turned out to be another factor that underpinned the British pound.
On the other hand, a generally positive tone around the equity markets dented demand for the safe-haven Japanese yen. This, in turn, provided an additional boost to the GBP/JPY cross and contributed to the ongoing positive move back closer to weekly tops.
It will now be interesting to see if bulls are able to capitalize on the move or the GBP/JPY cross meets with some fresh supply at higher levels as the focus remains on the Bank of England meeting. The UK central bank is scheduled to announce its decision at 11:00 GMT.
The BoE is widely expected to keep interest rates on hold at 0.1%. However, the MPC vote distribution over whether to continue the QE program at the current £895 billion levels, the updated economic projections and the BoE Governor Andrew Bailey's remarks will infuse some volatility.
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.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.