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GBP / JPY jumps to 137.22 but fails to hold above 137.00

  • Headlines of economic data overshadow those of Brexit for a few hours.
  • GBP / JPY in the face of dollar weakness and a certain appetite for risk.

The GBP / JPY is rising on Monday and has just climbed to 137.22, the highest level since October 14. However, the cross could not hold firmly above 137.00 and returned to the 137.10 and 136.70 range, where it was previously trading.

The advance of the cross is mainly due to some optimism in the market after data from China and expectation for the vaccine and a possible fiscal stimulus in the US. But each of these events has particular details. China’s growth was 4.9% in the third quarter, below expectations, the positive being the details of other reports that show a certain positive moment. The expectation of more stimulus does not yet have a firm agreement behind it. With regard to the coronavirus vaccine, there is progress, at the same time that announcements of more restrictions on circulation are expected in several regions of Europe.

Technical overview

The GBP / JPY is moving yet without a clear perspective on the bigger picture. This could change from a daily close well below 135.60, which would enable more lows. In the opposite direction, the first strong resistance appears at 137.35 and above it will follow 137.85 (October high). If the latter is broken, the pound would gain momentum and point to more rises.

Credits: Forex Street

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