March 28, 2022 14:44:33

The last week of the month has kicked off with another big move in yen pairs. The major hit 125 and has pulled back after the BoJ intervened in bond markets to try and cap bond yields. This comes at a time when most other major central banks are doing the opposite to this and tightening policy with yields rising.

The pound has also been volatile. BoE Governor spoke earlier today and sounded more cautious. He said the bank is starting to see evidence of a growth slowdown. But there are risks on both directions for the outlook with policymakers looking for more flexibility in its decision making.

There were close to 150bps of rate hikes priced in by markets at the start of the day. Many economists thought this was excessive with the cost of living crisis set to depress growth in time. Recent consumer confidence data has backed this view up as it fell to a record low.

GBP/USD bears eye up swings lows

Last week’s candle warned of potential downside after prices convincingly failed to advance beyond 1.33. This area tallied with a Fib level (23.6%) at 1.3295. In fact, the failure to close above 1.32 looked bearish, while intraday price signals looked weak at the start of the day.

Support from the December low at 1.3160 has been broken today. Bears will have their eyes firmly on the recent swing lows around 1.30. If the pair manages to breakdown, targets below include 1.2853/61. Resistance is 1.3110/20.