GBP/USD and GBP/JPY Soar as Pound Sterling Reacts Positively to NI Protocol
The agreement between Sunak and the EU will be evaluated at home
Even though both Northern Ireland and England are still part of the United Kingdom, Rishi Sunak expressed optimism regarding the specifics of the most recent iteration of the Northern Ireland Protocol.
The new "Windsor Framework" proposed a red lane for goods leaving Northern Ireland and a green lane for goods going to the rest of the EU and Ireland, which would require more thorough inspections. To be approved, the agreed-upon compromise must placate both the DUP and Brexit-supporting Tories.
The pound has appreciated against several G7 currencies as a result of news that the deal is moving forward, which is something that hasn't been said all that often lately. According to the most recent results of the Gfk consumer report, UK citizens' economic pessimism appears to be slightly easing as they anticipate an improvement in their financial situation in the coming months.
NOTED POUND STERLING TECHNICAL LEVELS
At the 23.6% Fib retracement at 1.1950, cable stopped its declines, closing above the psychologically significant 1.2000 level. GBP/USD has maintained its bullish momentum today by trading above the resistance of the descending trendline. The pair might aim for a return to the top side of the multi-month range between 1.2000 and 1.2445 if it closes above the trendline, which would indicate that bullish momentum may follow. Before that, the pair views 1.2000 as support and 1.2300 as the next level of resistance.
GBP/JPY INCREASES ON BOJ DOVISHNESS, NI PROTOCOL OPTIMISM
The yen has given up a lot of the gains it had made as a result of widespread rumors that the Bank of Japan (BoJnewly )'s nominated head, Kazuo Ueda, might implement a policy change. Since that time, the person tipped to succeed Kuroda in April has distanced himself from rumors that the Bank might be moving in a different direction, insisting that low-interest rates and loose monetary policy are still appropriate.
The pair is on track to post a third day of impressive gains (GBP strength, JPY weakness). Prices recently rose off 161.30, a significant level of support in 2022, and the 23.6% Fib of the significant 2020 to 2022 move at 160.80. Bulls will target 166.30 rather than 169.00. Support still exists at 161.30.