GBP/JPY recovers further and climbs to 1-week highs

The pound is rising for the third day in a row against the yen, as it continues to recover from 8-week lows. Since UK PM Theresa May speech GBP/JPY has risen 500 pips. 

Today the key driver behind the rally is the decline of the yen in the market. The Japanese yen dropped across the board amid a rally in the USD/JPY pair, that rose above 115.00 as US bond yields jump for the second day in a row. The 10-year yields, that on Tuesday reached the lowest since November at 2.30%, its now at 2.487%. Also, the pound, received some support today from the decline of the EUR/GBP pair. 

PM May's conciliatory speech eases Hard-Brexit fears in the near-term - MUFG

GBP/JPY  holds a bullish tone

Today the pair opened trading around 140.50 and recently hit 142.18, the highest since January 9. It was trading at 141.95/98, up 1.25% for the day. 

The rally so far stopped at the 20-day simple moving average, that stands at 142.15. A consolidation on top, could open the doors to more gains. Potential resistance levels are located at 142.50 (Jan 5 low) and 143.15 (Dec 29 high). On the flip side, support might lie at 141.45 (Jan 10 & 11 high), 140.10/15 (Jan 17 high) and 139.15 (Jan 18 low).