BUZZ-COMMENT-Pound's rebound vs haven yen would be a fade toward 136
Sept 22 (Reuters) - Sterling faces a perfect storm of renewed COVID-19 restrictions , a looming Brexit deadline and negative-rates speculation that should make the pound a sell on rallies against the safe-haven yen.
Though the pound lifted off its lows after BoE Governor Andrew Bailey said the bank's research into negative rates did not mean it would use them , the headwinds facing Britain could keep speculation alive in markets.
GBP/JPY stopped at the day's 133.02 low as GBP/USD found support near its 200-day moving average at 1.2725.
GBP/JPY daily RSIs at 18 are oversold, but there are no other clear technical markers of a major low having been made. Prices have closed below the 100-DMA since Friday, now at 135.70. The daily tenkan has tumbled to 135.68, reinforcing that resistance, particularly with GBP/JPY and the tenkan below the daily cloud base at 135.96.
The last two daily closes fell below the 38.2% Fibo of the March-September pandemic recovery at 135.60, solidifying resistance there. GBP/JPY breached the 50% Fibo at 133.41, suggesting limited support and deeper retracement risk.
And, risk-sensitive GBP/JPY will need stock markets to regain traction.
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(Randolph Donney is a Reuters market analyst. The views expressed are his own.)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.