GBP / JPY rises to more highs in over a week past 152.00

• GBP / JPY advanced for the fifth consecutive session on Monday.
• A general weakness in the dollar extended some support to the British pound.
• Nervousness over COVID-19 benefited the yen and could limit gains.

GBP / JPY reversed an early fall in the European session to the 151.40 region and jumped to highs in more than a week, around the 152.15 / 20 region in the last hour.

The cross attracted some buying after the decline on Monday and turned into positive territory, on track to have the fifth consecutive daily gain amid a modest rally in demand for the pound. Despite the stalemate in talks between the European Union and the United Kingdom on the Northern Ireland Protocol, a weaker dollar gave sterling some support. It is worth remembering that the EU rejected the UK’s demand to rewrite a post-World Trade Agreement. Brexi involving Northern Ireland.

Meanwhile, the COVID-19 situation in Great Britain It has worsened in recent weeks amid the spread of the highly contagious delta variant of the virus. This could prevent traders from placing aggressive bullish bets around GBP / JPY. Aside from this, some caution in equity market traders benefited the Japanese yen which acts as a safe haven and could do even more to limit GBP / JPY gains, at least for the time being.

There is no major economic data moving the UK market. The focus could be on what happens with Wall Street and the bond market, although the influence of the dollar will also be key. A stronger dollar could weaken GBP / JPY. There are no strong signs yet that a bottom has been reached near the 148.45 region. (minimum of four months). The next relevant hurdle is near the 152.60 / 65 region, above that the cross seems to be ready to target the 153.00 zone again.

Technical levels