GBPJPY, Daily
Following the big gaps on the GBP pairs yesterday after the surprise lead for the Leave group in the UK EU Referendum, I wrote that GBPJPY “Technically sterling is looking oversold, and should retrace from here. I expect some retracement from this current oversold level (153.30 at the time) to the 156.00 – 157.000 area”.
Thanks in part to more polls, Sterling rallied on new Brexit polls, which indicate a swing back of support for the Remain-in-the-EU campaign, the retrace was completed with 24 hours for a net gain of over 200 pips.
Two new polls, a YouGov survey for the Times and an ORB telephone poll for the Telegraph, showed the Remain camp in the lead, reversing yesterday’s polls that showed the opposite. Cable spiked over 1.5% to an eight-day peak of 1.4662 before ebbing back to the low 1.45s, still up over 50 pips from yesterday’s closing level. The mix of the Brexit polls and the thin market for sterling in Asia caused the whippy price action.
The Daily support remains at 154.30 and this level needs to be breached and broken before any further down action, on the upside 160.60 and 162.00 will provide resistance.
Janne Muta
Chief Market Analyst
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