GBP/JPY Price Analysis: Bounced off at robust support at 149.20-40, rallies up to 150.50
- After falling for eight consecutive days, the British pound snapbacks edges up 0.50%.
- A risk-on market mood benefits the risk-sensitive GBP.
- GBP/JPY: Found strong demand around the 149.00 area, as the pair gains 130+ pips in the day.
The British pound advances during the New York session as risk-sensitive currencies rise, while the safe-haven ones like the Japanese yen and the Swiss franc fall sharply. The GBP/JPY is rising, trading at 150.51 at the time of writing.
The market sentiment is upbeat in the New York session, with US equity indices rising between 0.77% and 2.62%. It seems that the Omicron variant, although being more transmissible, it causes mild symptoms that would not threaten people’s life. That alongside the US central bank looking to finish the bond taper in the Q1 of 2022, dented the prospects of safe-haven assets, with US equities rallying and US bond yields following their footsteps.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY has been on a free fall since November 24, when it broke the 50-day moving average (DMA). However, the December 1 low at 149.60 seems to be the bottom of the eight-day dip, at press time advancing 0.50%. Furthermore, an upslope trendline that travels from July swing lows to September cycle lows was briefly broken, but GBP bulls entered around the 149.40s area, pushing the pair higher.
In the outcome of a daily close above 150.45, that would form a bullish engulfing candle pattern with bullish implications. The first resistance on the way up would be the 151.00 psychological level. The latter’s breach would expose the November 29 high at 151.90, followed by the 200-DMA at 152.43.
On the flip side, the GBP/JPY first support level would be the 150.00 figure. A break under that level would expose the upslope trendline lying around 149.59, followed by the October 1 swing low at 149.22.