GBP/JPY – clocks two-week high on hopes of ‘Bremain’

Bid tone around GBP strengthened in Asia as markets position themselves for a ‘remain’ vote victory, courtesy of which the GBP/JPY cross clocked a two-week high of 155.69.

Trades above 155.00

A minor fall back below 155.00 handle was quickly reversed after latest batch of polls shows ‘remain’ vote maintains its overall lead. At the time of writing, the cross was trading around 155.25 levels.

UK votes on EU membership today and the results are expected to hit the wires 24 hours from now. The outcome will not only have a major impact on GBP, but would also affect demand for Yen. Hence, the pair is likely to be among the top 5 of the trader’s watch list.

Polls open at 6 GMT. Expect volatility to pick up from 6 GMT onwards and last till Friday’s NY closing or so.

GBP/JPY Technical Levels

The immediate hurdle stands at 156.58 (50-DMA), above which prices could test 157.47 (falling trend line – Nov 19 high-Dec 7 high). Acceptance above the same could trigger short unwinding and help the pair attack 158.53 (Mar 23 low).

On the other hand, breach of support at 154.58 (previous day’s low) would expose 153.30 (daily low) under which 5-DMA support of 152.78 could be put to test.