GBP/JPY finds support at 155.90 and bounces up towards 156.45

• Pound reversal from 157.75, contained at 156.00 area.
• The sterling trims losses following an upbeat UK Budget Report.
• GBP/USD remains biased higher, aiming to 158.22 – DBS Bank.

The pound’s reversal from 157.75 witnessed on Tuesday has failed to confirm below the 155.90/00 support area, where the pair found support to bounce up on Wednesday’s US trading time and return to the 156.45 area.

The sterling appreciates on upbeat budget forecasts

The pound has shrugged off the previous weakness on Wednesday, trimming losses against its main rivals on the back of the positive economic forecasts released by the British finance minister, Rishi Sunak, at the Autumn 2021 budget statement.

Sunak assured that The British economy will expand at a 6.5% pace in 2021, beating previous forecasts of a 4.0% growth predicted at the time when COVID-19 lockdowns were still active. Beyond that, the Office for Budgetary Responsibility (OBR) expects the deficit for the financial year to shrink to 7.9% of the GDP, down from previous estimations of 10.3%.

GBP/JPY is expected to resume its uptrend, aiming to 158.22 – DBS Bank

On a broader view, according to Benjamin Wong, Strategist at DBS Bank, expects the pair to resume its uptrend from late-July lows:  “A quick look at the daily Ichimoku charts shows bullish momentum remains in a feverish pitch, and there is no affirmation that the 158.22 highs are a verified absolute top. Hence, we remain open to the possibility of the cross assailing higher levels before it ends terminally the bull run that currently came off 148.47, the July 2021 lows.”

Technical levels to watch