GBP/JPY threatens a break of key resistance level

Technical Analysis

Author: Justin Low | gbpjpy

GBP/JPY tests the 200-day moving average

With sterling leading the charge today, the pair is once again making strides towards the upside but is currently up against a familiar resistance level in the form of the 200-day MA (blue line) @ 149.35.

This was a level that has stalled upside moves so far this month. The high today for the pair was 149.58 but the key here would be for buyers to post a daily close above the 200-day MA. That would bode well for a move towards the 38.2 retracement level @ 150.00 and subsequently towards the 100-day MA (red line) @ 150.62.

The risk for the pair now is that Brexit is now back as the main focus. Data points and concerns about the BOE hiking in August is cast aside for the time being, so headline risk is going to be a real driver in the pair if that's the case.

Technical levels will do well to define and limit risk, but the potential of headline risk skewing price action cannot be understated so make sure you do keep your eyes on those headlines crossing the wires.

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