GBP/JPY jumps more than 200 pips as pound strengthens

• Pound soars after EU negotiator Barnier mentions EU will offer the UK a unique deal.
• GBP/JPY rises more than 200 pips, also boosted by a decline of the Japanese yen.

The Pound jumped in the market after comments from EU Chief negotiation Michel Barnier. He said the European Unions wants to keep close ties with the UK. “We are prepared to offer a partnership with Britain such as has never been with any other third country”, said Barnier. His words triggered optimism about a positive Brexit deal and pushed the pound sharply higher.

GBP/JPY rose from 143.50 to 145.49, reaching the highest level since August 3. From day’s low climbed more than 250 pips, and it was trading above the 145.00/20 resistance area. The sharp rally was also boosted by a decline of the yen. The Japanese currency weakened amid risk appetite and also rising US yields. The 10-year hit 2.90% for the first time in two weeks.

Technical outlook

GBP/JPY broke several key resistance levels. The rally was capped by the 145.50 area that is now the immediate resistance, followed by 146.45 and then 146.95. Above lies a downtrend line at 147.30. On the flip side, support levels might be seen at 144.40, 143.70/80 (Jun low) and 142.80.