GBP/JPY rises to test key resistance level

The pound is among the top performers on Thursday, the day after the official start of the formal Brexit. GBP/JPY is having the best day in two weeks, on the back of the strong pound and risk appetite, that weakened the demand for the Japanese currency. 

Yesterday GBP/JPY bottomed at 137.50, hitting the lowest in three months. It ended the day around 138.00. Today it approached yesterday’s lows during the Asian session but then bounced to the upside, and jumped to 139.29. 

The rally was capped at the strong resistance area located around 139.20/30, where a downtrend line stands and also the 20-day moving average. If the pound breaks higher and consolidates on top it could open the doors to further gains, removing the bearish bias of the pair. 

Technical levels 

To the upside, resistance levels might be located at 139.30 (daily high), 139.50, the 140.00 (psychological) and 140.60 (Mar highs). On the flip side, support might be seen at 138.50, 137.51 (weekly low) and 137.00/05 (Mar 17 low).