- A combination of factors helped GBP / JPY extend the gains on Wednesday.
- Decline in COVID-19 cases in the UK helped the British pound.
- Yen loses strength after stabilization in stocks.
GBP / JPY maintained its bullish tone during the European session and climbed to almost two-week highs at 152.80. Then it fell back, finding support above 152.40 and in the preview of the American session it is approaching the highs.
Following Tuesday’s modest pullback, the cross found demand on Wednesday to extend the strong recovery from 148.45, the lowest since March. In the absence of negative Brexit-related headlines, the pound held firm, partly supported by the declining trend in COVID-19 delta-variant infections. New cases declined for the seventh day in a row on Tuesday.
On the other hand, the worsening COVID-19 situation in Japan, coupled with signs of stability in equity markets, detracted from the yen’s appeal and provided an additional boost to GBP / JPY. Japan reportedly assesses the state of emergency in neighboring Tokyo prefectures amid record new cases on Wednesday.
The focus now shifts to the Federal Reserve decision and Jerome Powell’s press conference, in the second part of the American session. These events have high potential to affect the market, including GBP / JPY. The cross maintains a short-term bullish tone and faces resistance at 153.00, followed by 153.45. In the opposite direction, 152.05 / 10 is a support zone to watch out for, and then 151.35
Technical levels
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