GBP/JPY: Rebound finds resistance at 147.00

The pound erased losses against the yen and now is consolidating gains, off daily highs. GBP/JPY avoided a sharper decline during the American session amid a weaker yen. 

Correction over?

The pair opened the week lower at 145.70, extending the correction that started last week from levels on top of 148.00 (5-month highs). It quickly bounced to the upside boosted by the rally of GBP/USD. 

It peaked at 147.00, the highest since Thursday and pulled back. It was trading at 146.60, more than 50 pips above Friday’s closing price. The retreat from the highs was modest. The decline of GBP/USD was offset by an up-move to fresh highs of USD/JPY amid rising US bond yields. 

The pair is still below the level it had on Thursday before the statement, minutes and Inflation Report from the Bank of England. A clear break above 147.00 could signal the end of the correction and open the doors for a test of 148.00.

Levels to watch 

To the upside, resistance levels might be seen at 147.00 (daily high),  147.55 and 148.00 (psychological). On the flip side, support might lie at 146.30 (American session low), 145.70 (May 15 low) and 144.65 (May 4 low).