GBP/JPY Price Analysis: Falls to 153 as Omicron News Fade Optimism
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- The GBP/JPY exchange rate retreats from a one-month high and remains close to a low within the day.
- This market mood is influenced by a bright calendar and a festive mood.
- Brexit problems, fears of Omicron cases, and Chinese-American struggles are testing the old risk mood.
As of early Friday morning in Europe, the GBP/JPY price analysis shows a three-day uptrend, falling 0.17% during the day to 153.20. This marks the pair’s first turn from 153.70.
The pair’s latest weakness may be caused by the market’s consolidation during the West’s Christmas holidays. In addition, bearish sentiment is exacerbated by recent doubts about Merck’s Covid-19 pill, approved by the FDA on Thursday.
The UK saw record levels of Coronavirus infections and a rise in infections in Europe. A discussion of France’s willingness to pursue cases with the UK over fishing licenses ends with firmer US government bonds affecting GBP/JPY values. In addition to higher interest rates, mixed results in Asian stocks also weigh on the pair.
Studies show that a South African variant of covid called Omicron reduces hospitalization keep risk aversion at bay.
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At the same level were the results of the British Chamber of Commerce (BCC) survey for October. According to Reuters, the results mention that 45% of companies have experienced very or relatively difficult times when trading goods with the EU, up from 30% in January when the Trade and Cooperation Agreement (TCA) went into effect.
Speaking of the data, US durable goods orders and the PCE price index for November rallied but failed to reverse previous gains in equities and riskier assets, despite the US government prioritizing interest rates ahead of the close.
While the light calendar and re-pricing of risk catalysts appear to be driving the GBP/JPY away, holiday sentiment could limit short-term moves.
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Although this is true, GBP/JPY traders should look for risk catalysts around the Western Christmas Eve holiday to gain momentum.
GBP/JPY price technical analysis: Bulls facing resistance
The GBP/JPY cross looks positive above 153.00, staying above the key SMAs. However, the price is facing stiff resistance around the supply area. Moreover, the clues from volume data are quite mixed, showing no clear bias at the moment.
