Rally stalls around 157.00 despite positive market sentiment

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  • The British pound is up 0.75% as the American session progresses on Friday.
  • Investor market sentiment is upbeat, as reflected by Wall Street, trading at a profit.
  • GBP/JPY Price Forecast: To the upside, but starting to face solid resistance around the 157.00-158.00 area.

During the American session, the British pound is posting a notable rally on the week, up almost 3% so far. At the time of writing this article, the pair GBP/JPY trades at 157.07.

Risk sentiment is positive in the markets. European stocks posted gains, while US stocks will end the week in the green. In the forex space, risk-sensitive currencies are on the upside, while the laggards are the EUR and JPY, down 0.40% and 0.50%, respectively.

The factors causing sentiment shifts are the Russia-Ukraine conflict, along with the events surrounding the conflict, meaning that Russia has asked China for military and financial aid, while the US is threatening to impose sanctions on the Asian dragon.

On Friday, US President Joe Biden and Chinese leader Xi Jinping held a video conference in which Chinese President Xi assured that China does not want a war in Ukraine. Despite that, Xi criticized the sanctions imposed on Russia, saying that “ordinary people are the ones who suffer.”

Overnight, the GBP/JPY pair opened around 156.00, although it broke above Asian session highs, later stopping around the 156.50 area. However, once the North American session started, the cross extended its rally towards 157.00.

GBP/JPY Price Forecast: Technical Outlook

GBP/JPY is biased to the upside and reached a daily high near 157.22. It recently retraced below the 157.00 mark, but the presence of the daily moving averages (DMAs) in an orderly bullish fashion, well below the price of the pair, confirms the direction of the trend, which is bullish.

That said, the first GBP/JPY resistance would be 157.00. A breach of the latter would expose the confluence of a 6-month downtrend line and the daily high from Feb 18 at 157.29, followed by the 158.00-06 area, converging with the yearly high.

Additional technical levels

Source: Fx Street

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