GBP/JPY unstoppable, climbs another hundred pips

• GBP/JPY jumps more than 500 pips from weekly lows. 
• Pound supported by optimist around Brexit talks. 
• Yen weakened amid rising US bond yields. 

The GBP/JPY pair rose another hundred pips during the American session, boosted by a slide of the yen across the board. From Tuesday’s low, it rose 530 pips. It is about to post the second highest daily close since June 2016.

A test of 2017 highs on the cards? 

On Tuesday GBP/JPY rebounded sharply after hitting a 7-week low, making a strong reversal. It rose from 146.95, closing the day above the 20-day moving average. Also, it broke a short-term downtrend. Yesterday confirmed the break and rose a hundred pips. 

Today, it moved all day with an upside bias and so far it gained 200 pips. On European hours, the rally was boosted by a stronger pound on the back of improved expectations about Brexit negotiations. In fact, the optimism has been the main driver of Pound’s recent gains. 

The yen has been trending lower on the back of an improvement in risk appetite. Recently spiked lower after the US 10-year yield jumped from 2.38% to 2.43%, reaching the highest in a month. That move triggered a slide of the yen across the board, pushing GBP/JPY further to the upside. 

The pair peaked at 152.30, the highest level since September 22. The bullish momentum remains intact and a test of 2017 highs located slightly below 153.00 seems likely. A consolidation on top of 153.00 could open the doors to further gains over the medium-term.