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GBP/JPY – Fresh Lows Ahead?
GBP/JPY made yearly lows today dropping below the 150.00 level before recovering slightly ahead of the North American close. The pair is at the intersection of the perfect storm in the Brexit trade as it stands to either benefit or suffer the most from the results.
The Brexit story is not only a story about the UK economy but also about the stress on global capital markets. If UK were to leave EU it could start a trend that could unravel the current economic order and send markets into massive selloffs which is why along with the decline in GBP USD/JPY has been dropping as well. Of course if the risk passes the relief rally would trigger a swift short covering move in both pairs.
For now the GBP/JPY remains under pressure and another test of 150.00 could open the way towards 145.00 while the upside is capped at 155.00 until the referendum vote provides clarity.