GBP/JPY sliding back down as 2-year Treasury yield hits 2.2%. Based on this, what are the market participants now doing? Find out on the 20 February GBPJPY Technical Analysis.
20 February, GKFX – GBP/JPY is slipping back to test below 149.20 in Tokyo markets as markets knee-jerk reacts to rising bond yields.
The Sterling managed to gain around 30 pips in the overnight session, but has since given it all back and is once again trading below the 149.20 handle during Tokyo as traders resume jumping into Yen.
GBP/JPY backing down on Treasury spikes
Market participants are seeking a safe space following the US 2-year Treasury yield reaching its highest point since 2008, touching 2.2% in the overnight session. Treasuries are up across the board today, cooling risk appetite and keeping the Yen buoyant despite the Bank of Japan desperately trying to keep the JPY from going any higher, even going so far as to deliver a thinly-veiled threat of market intervention last Friday if things don’t start going to plan.
GBP is also coming under pressure following the revelation that the UK has explored a fallback plan if Brexit negotiations should turn sour. The report is poorly timed, as the UK is putting serious effort into trying to develop public confidence in the Brexit process.
20 February GBPJPY Technical Analysis
Sterling has lost ground against the Yen considerably recently, declining from a high of 156.60, and is inching closer towards the 200-day SMA, currently sitting at 147.58. Continued declines will see the pair running into support at 148.12, and the 200-day SMA further below coinciding with support from 147.60. Upside resistance is being provided by swing points at 150.20, 150.80, and 151.43.
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