GBP/JPY freight train stalls 76.4% Fib retracement level

The bullish momentum in the GBP/JPY pair appears to have run out of steam around 145.88 (76.4% Fib retracement of 148.11-138.67) levels, courtesy of the overbought conditions on the Intraday charts and due to the risk-off in the equity markets. 

Carney’s hawkish twist and the resulting demand for the British Pound did push the cross to a high of 146.53 yesterday. However, the Japanese Yen caught bid amid losses in the US stocks, thus the cross trimmed gains to end the day just below the 76.4% fib level of 145.88. 

Yen strengthens on risk-off

The Dow dropped 0.78% in the overnight trade, while the NASDAQ fell 1.44%. The risk-off sentiment has been carried over to the Asian markets as well. Australia’s S&P ASX 200 is down 1.64%, while the Hang Seng is down 1%. 

No wonder the Japanese Yen is on the rise. The USD/JPY pair has just breached the key support level of 111.85 (inverse head and shoulder neckline) and is trading lower at 111.77; down 0.37%. The GBP/JPY has been dragged lower as well, now trading at 145.56; down 0.23% on the day. 

GBP/JPY Technical Levels

A break above 145.88 (76.4% Fib R) would open up upside towards 146.53 (previous day’s high) and 147.11 (May 16 high). On the downside, breach of support at 145.43 (May 25 high) could yield a sell-off to 145.00 (zero levels) and 144.58 (5-DMA).