GBP/JPY awaits breakout from 200-pip range

GBP/JPY continues to hover in a 200-pip range for 126.00-128.00 levels for the tenth straight session.

Pound supported by Carney’s measurd performance

BOE governor Carney did defend QE program while being quizzed by the House of Lords economic affairs committee but added that they are not overly dependent on unconventional measures and downplayed negative rates by calling them ‘unnatural’.

He also took note of rising inflation expectations, which for markets meant that another rate cut might not happen this year. Consequently, GBP/USD quickly recovered from sub 1.21 levels to 1.22 levels.

However, Dollar-Yen pair retreated from the NY session high of 104.88 as well, thus leaving the GBP/JPY cross in the 200-pip range of 126.00-128.00 levels.

GBP/JPY Technical Levels

A break above 128.00 (upper end of the range + descending trend line on daily chart) could yield a quick fire move to 130.00 (zero figure), above which a major hudle is seen at 131.54 (50-DMA). On the other hand, a breakdown of support t 126.00 (lower end of the range)would open doors for a drop to 124.79 (Oct 7 low) and 124.00 (zero figure).