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FOREX: GBPJPY Should Look Through CBs, More Closely Pinned to Sentiment

FOREX
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The sharp Deepseek-triggered slide in equity futures is helping underpin haven currencies this morning, tipping USD/JPY to new YTD lows. It's GBPJPY that should draw some interest given the risk-off haven rally as well as GBP's recent spell of uncertainty - which drove GBP/JPY 1week vol turnouts to hit levels last seen in the wake of the November US elections.

  • While the cross's leg lower today is nearing 1%, it's still clear of Friday lows at 192.08. Importantly, the cross is less exposed to the central bank flurry midweek (Fed, BoC, ECB), so should be more clearly pinned to market sentiment and global equities.
  • 2025 range has been defined by the upleg posted off late November lows - with markets finding both the 76.4% retracement of the fade off highs as a decent support mid-January and 194.81, the 38.2% Fib, as a solid inflection point to cap last week's rally.
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The sharp Deepseek-triggered slide in equity futures is helping underpin haven currencies this morning, tipping USD/JPY to new YTD lows. It's GBPJPY that should draw some interest given the risk-off haven rally as well as GBP's recent spell of uncertainty - which drove GBP/JPY 1week vol turnouts to hit levels last seen in the wake of the November US elections.

  • While the cross's leg lower today is nearing 1%, it's still clear of Friday lows at 192.08. Importantly, the cross is less exposed to the central bank flurry midweek (Fed, BoC, ECB), so should be more clearly pinned to market sentiment and global equities.
  • 2025 range has been defined by the upleg posted off late November lows - with markets finding both the 76.4% retracement of the fade off highs as a decent support mid-January and 194.81, the 38.2% Fib, as a solid inflection point to cap last week's rally.