GBP/JPY has regained bid tone in Asia but is having a hard time extending gains above 149.00, courtesy of the risk aversion in the equity markets. What else discussed in the 14 March GBPJPY Technical Outlook? Read on!
14 March, GKFX – Currently, the pair is trading at 149.00, having clocked a session high of 149.17 earlier today. The British Pound rose against the greenback in the North American session as investors digested another high profile exit from the White House. Kathy Lien from BK Asset Management writes,
“Tillerson was pushed out because he clashed with Trump on recent decisions. For Cohn, it was the tariffs and for Tillerson, it was the President’s approach to North Korea and the Iranian nuclear deal.”
Fears of Trade War
However, the turmoil in Washington weighed over the US stocks and put a bid under the Japanese Yen. Further, Politico reported that Trump administration is considering a package targeting $30 billion a year worth of Chinese imports. The resulting fears of trade war also hurt risk sentiment and ensured the GBP/JPY stayed below 149.43 (38.2 percent Fibonacci retracement of 156.61-144.99).
The Chinese response to tariff talk is awaited and could influence the risky assets and the Japanese Yen. It is worth noting that GBP ranks last on the list of anti-risk currencies, courtesy of the current account deficit and Brexit uncertainty. Hence, trade war fears could yield a big drop in GBP/JPY.
14 March GBPJPY Technical Outlook
A daily close above 149.43 (38.2% Fib) would allow a stronger rally to 150.68 (100-day moving average) and 151.05 (50-day moving average). On the downside, close below 147.96 (200-day MA) would crowd out bulls and open doors for 146.23 (March 7 low). A violation there would expose recent low of 144.99.
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