GBP/JPY: Down to the 150 area amid Brexit worries, mixed markets
- The GBP/JPY is trading around 150 after dipping to lower ground.
- Worries about Brexit weigh on the pound, while the yen remains steady amid slightly higher stock markets.
- The technical outlook points to further potential for downside moves.
The GBP/JPY is trading lower in the new week. The cross fell to a low of 109.64 before climbing back above the 150 level. On Friday, the pair dipped below 149 and reached a low of 148.90.
The new trading week started with no significant economic figures on the agenda, leaving the stage to political news and sentiment. In the UK, Prime Minister Theresa May will reportedly deliver a speech about Brexit in the next few days. Last week, talks had a bitter note as Chief EU Negotiator Michel Barnier hinted that the transition period is at risk.
The Japanese yen moves predominantly on the mood in stock markets. US stock markets are higher, but there is a long road to recover from the crash that dominated the headlines last week. The yen is not selling off too quickly.
GBP/JPY Technical Picture
The GBP/JPY has broken below the 50-day Simple Moving Average. The line, noted in yellow on the chart, has worked as support on two occasions and the break below it has seen further falls. The 200-day SMA awaits at 147.50.
Before this level, the low mentioned above of 148.90 awaits the cross. Further below, the trough of 147 recorded in early November provides further support.
Looking up, 152 supported the pair in January and worked as resistance in October. The next line of resistance is the recent peak of 156.60 that was recorded in early February, just before the recent market turmoil.
The RSI is at low levels pointing to another downfall, but it is not in oversold territory just yet. All in all, the technical picture looks to further drops.
