• Pound outperforms across the board on Monday, benefit from Brexit deal.
• UK and European Union reach a new deal to resolve the Northern Ireland trade issue.
• GBP/JPY rises above the 200-day Simple Moving Average.

The GBP/JPY is rising sharply on Monday boosted by a stronger Pound across the board amid the Brexit agreement. The cross rose to 163.98, the highest level since December 20.

Brexit: a new protocol for an old problem

UK Prime Minister Rishi Sunak is announcing a “decisive breakthrough in Brexit talks”. The new deal, according to Sunak implicates changes to the Northern Ireland protocol.

Sunak and European Commission President Ursula von der Leyen are offering a joint press conference, explaining the new deal.

Ahead of the announcement, the Pound was already trading in positive ground across the board. GBP/USD hit 1.2050 while EUR/GBP tested levels under 0.8800.

The GBP/JPY is up by around a hundred pips. The pair peaked at 163.98 and then pulled back modestly as equity prices in Wall Street move off highs. Price is back above the 200-day Simple Moving Average. A consolidation above 164.00 would open the doors for a test of the next resistance area seen at 164.70.

The bias in the short-term point to the upside. A confirmation under 161.70 would change the outlook to neutral/bearish.

Technical levels