- GBP/JPY hit by risk aversion, correct finding support at 153.50.
- Consolidation between 154.40 and 153.50 likely.
The pound made a sharp correction versus the Japanese yen from the highest level in years. GBP/JPY failed to break above 155.00 and lost momentum. The decline in equity markets on Wednesday favored the decline by boosting the yen.
The decline found support at 153.50, a critical short-term support that, if broken should clear the way to more losses, targeting the 153.00 zone initially and then 152.20/30.
In the short-term, while above 154.00, the pound can rebound toward the 154.50 area. If it consolidates below 154.00m, another test of the recent low might take place.
The noise from the bond market and the decline in equity prices may keep the GBP/JPY in the 154.50/153.50 range for the moment, with risks tilted to the downside.
On a general perspective, while above 145.00/20 (long-term uptrend line) the outlook will remain positive of the pound.
GBP/JPY 4-hour chart
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