#GBPJPY @ 166.019 The pound retreats to levels below 165.00 on an alleged BoJ intervention. (Pivot Orderbook analysis)

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• The pound retreats to levels below 165.00 on an alleged BoJ intervention.
• The Japanese authorities have declined any comment.
• FX analysts are skeptical about the effectiveness of monetary interventions.

The pair currently trades last at 166.019.

The previous day high was 169.74 while the previous day low was 167.42. The daily 38.2% Fib levels comes at 168.85, expected to provide resistance. Similarly, the daily 61.8% fib level is at 168.31, expected to provide resistance.

The British pound has depreciated more than 2.5% in a few minutes during Friday’s US trading session in what seems like an intervention by the Japanese authorities to protect the yen.

The GBP/JPY was trading at 169.50, at a short distance to a six-year high of 170.25 before plummeting to session lows at 164.70. The pound’s bearish reversal has lacked any fundamental catalyst, and all signs point out to an alleged action by the Bank of Japan and the Ministry of Finance.

The Japanese Ministry of Finance has declined to comment on the issue.

Earlier during the week, however, BoJ officials and Japanese authorities reiterated their commitment to step in to curb yen volatility. On Friday, Finance minister Suzuki affirmed that Japanese authorities were dealing with currency speculators “strictly”.

On Thursday, Masato Kanda, Japan’s vice minister of finance for international affairs assured that the Japanese Government is ready to take action “as excessive volatility becomes increasingly unacceptable.”

Currency analysts are doubtful about the effectiveness of such actions while the fundamental reasons are adverse. The monetary policy differential between a hawkish Federal Reserve and the ultra-accommodative Bank of Japan is clearly favorable to the US dollar.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 165.55 at the time of writing. Pair opened at 168.64 and is trading with a change of -1.83 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 162.64, 50 SMA 162.82, 100 SMA @ 163.55 and 200 SMA @ 161.07.

The previous day high was 169.74 while the previous day low was 167.42. The daily 38.2% Fib levels comes at 168.85, expected to provide resistance. Similarly, the daily 61.8% fib level is at 168.31, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 167.47, 166.29, 165.16
• Pivot resistance is noted at 169.78, 170.91, 172.09

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