GBP/JPY – On recovery mode, still 100 pips away from 5-DMA

Asia is once again a happening place for Sterling, given the GBP/JPY is recovering lost ground, but still finds itself at least 100 pips away from the 5-day moving average located at 127.84 levels.

Short squeeze underway

Sterling bears are running for the exit in Asia after Bloomberg reported UK PM May has accepted a Parliamenty vote over her Brexit plans and stressed the fact that the outcome of the same would give her more room to negotiate better deals with EU countries.

The cross clocked a high of 127.09 levels. The 38.2% Fibo retracement of Friday’s high-low stands at 127.25. At the time of writing, the cross was trading just below 127.00 handle.

GBP/JPY Technical Levels

A break above 127.25 (38.2% Fibo) would expose 127.86 (5-DMA) beyond which a major hurdle is seen at 129.49 (10-DMA). On the other hand, a breakdown of support at 126.31 (23.6% Fibo) could yield a re-test of 125.29 (daily low) under which losses could be extended to Friday’s low of 124.79.