- Brexit-deal boosts the GBP bull case.
- Investors are piling into the pound.
- Hourly charts signal overbought levels.
- Firm action expected after the press conference
GBP/JPY trades near four-months highs after rallying through the first half of the European trading – now above 141.00.
The pair built on its overnight strength and traded strongly in the green for the second straight day. GBP/JPY has rallied more than 400 pips from the lows registered on Monday – below the 137.00 -region.
The main factor driving the rally in the pair is the imminent Brexit deal between the UK and EU, triggering a strong buying interest in the GBP. Also, the equity rally undermined the JPY’s haven-linked appeal, thus providing additional lift for the GBP/JPY to record the highest level since early September.
Many technical levels on the upside got eliminated in the deal-boosted GBP/JPY, triggering stop-loss orders all the way up from the earlier heavy-offered levels around 140.40-50. The resultant momentum attracted more buyers above 140.70, setting the stage for additional strong gains in the pair.
Overbought signals are flashing in the hourly charts, cautioning the traders from taking an aggressive bullish stance for now. In addition, an official confirmation regarding the Brexit deal has to come for further highs in the GBP/JPY. Traders will eye the upcoming press conference in a few hours.
At the time of writing, one British Pound buys 140.67 Japanese Yens, up 0.72% as of 01:31 PM UTC.