17 Mar 2015
GBP/JPY drops, eyes 200-DMA
FXStreet (Mumbai) - The GBP/JPY pair fell on Tuesday, inching fast towards its 200-DMA located at 178.94 levels. The weak UK Gilt yields continue to weigh over the British Pound.
Pound drops with Gilt yields
The 10-year yield in the UK fell 2.3 basis points to 1.654%, while the 2-year yield, which mimics the short-term interest rate expectations fell 1.5 basis points to 0.452%. The drop in the yields further weakened Pound which was already pressure due to buying in the EUR/GBP cross. Moreover, the yields have been dropping after the Bank of England governor Carney expressed concerns over the strength in the Pound last week, which led markets to believe that the interest rate hike would be delayed.
GBP/JPY Technical Levels
The immediate support is seen at 178.94 (200-DMA), under which losses could be extended to 178.22 levels. On the flip side, resistance is seen at 179.56 (5-DMA) and 180.00 levels.
Pound drops with Gilt yields
The 10-year yield in the UK fell 2.3 basis points to 1.654%, while the 2-year yield, which mimics the short-term interest rate expectations fell 1.5 basis points to 0.452%. The drop in the yields further weakened Pound which was already pressure due to buying in the EUR/GBP cross. Moreover, the yields have been dropping after the Bank of England governor Carney expressed concerns over the strength in the Pound last week, which led markets to believe that the interest rate hike would be delayed.
GBP/JPY Technical Levels
The immediate support is seen at 178.94 (200-DMA), under which losses could be extended to 178.22 levels. On the flip side, resistance is seen at 179.56 (5-DMA) and 180.00 levels.