GBP/JPY stuck at 5-DMA

Offered tone around JPY gathered pace and broader market sentiment improved following the conclusion of the Presidential debate. GBP/JPY jumped above 130.00 and is currently stuck at 130.85 (5-DMA) levels.

Focus shifts to Europe

Ahead in the day, the focus is likely to be on the European banking sector. Chancellor Merkel has ruled out state aid for Germany’s Deutsche Bank. Furthermore, news hit the wires yesterday that Commerzbank is due to cut at least 5K jobs.  

Moreover, the questions are being asked whether Deutsche Bank mess would hurt other European banks and what the bank does not get any official aid. It is worth noting that the risk-on rally could quickly unwind on fresh bad news out of banking sector.

GBP/JPY Technical Levels

A break above 131.12 (hourly 100-MA) would open doors for 132.28 (Sep 22 high) beyond which hourly 200-MA level of 132.40 could come into play. On the lower side, breach of 130.68 (hourly 50-MA) would expose 130.37 (hourly 10-MA) and 130.00 levels.