GBP/JPY - Bullish move stalls around 140.00, what’s next?

Thursday’s sharp recovery from the low of 138.56 appears to have run out of steam around 140.00 handle for now, although the BOE’s hawkish twist and Brexit clarity suggest potential for a further rally in the GBP/JPY pair.

Kristen Forbes voted for a rate hike

The BOE kept rates unchanged, but the details revealed Kristen Forbes voted for a 25 basis point hike. The hawkish surprise is likely to keep the British Pound well bid over the next few days.

Brexit clarity

The article 50 is now a law. Pound loves Brexit clarity and so does UK businesses. If the negotiations with the EU begin on a smooth note, the talk of a BOE rate hike could gather pace.

In the meantime, Yen could remain under pressure on account of the risk-on action and the uptick in the treasury yields. Thus, GBP/JPY looks set to take out the 50-DMA level of 140.80.

GBP/JPY Technical Levels

The pair was last seen trading around 140.02 levels. A break above 140.18 (previous day’s high) would open doors for a 50-DMA level of 140.80 and 141.00 (zero figure). On the downside, a major support is seen directly at 138.98. A violation there could yield a revisit to 138.56 (previous day’s low) and 138.00 (zero figure).