- GBP / JPY briefly surpassed 145.00 for the first time since December 2019 on Wednesday.
- The pair appears poised for a ninth week of rolling gains as the GBP continues to benefit from the vaccine optimism.
Wednesday was the usual business for the GBP/JPY; the pair continued to move towards a new post-pandemic high and briefly surpassed the 145.00 level for the first time since December 2019. As it stands, with GBP / JPY currently up 0.2% on the week, the pair is on its way of a ninth consecutive week of earnings. On the day, the pair was up 0.3%.
Most of the pair’s rally came at the time of the opening of European cash trading, when GBP / JPY rallied from 144.50 to above 145.00 in about two hours. Since then, the pair has been consolidating at 144.90 as the bulls ponder which technical milestone to target next. A downtrend is likely to come into play linking the highs of September and November 2018, March and December 2020 around the 146.00 mark. A breakout above that would open the door for a further rise towards the 148.00 level (the December 2019 high).
GBP / JPY fundamentals
GBP has outperformed in recent months after the UK avoided a no-deal Brexit outcome and has subsequently been the fastest country to roll out vaccines, setting the stage for a comparatively early economic reopening later in the year. . Meanwhile, amid sharp rallies in equities, commodities and other risky assets in anticipation of further US fiscal stimulus, continued support from the central bank and the rapid global launch of vaccines that are expected to control the pandemic, safe haven assets like the JPY have been out of favor.
The combination of a stronger GBP and a weaker JPY has, of course, been good for GBP / JPY. As noted, the pair appears poised for a ninth consecutive week of gains. Since the beginning of October 2020 (19 weeks ago), the pair has only seen 4 weeks in the red and, during that time period, it has rallied about 7.5%.
Technical Levels
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