GBP/JPY eases from over one-week tops, up little around 151.35-40 region
|- GBP/JPY prolonged its recent recovery move and climbed to over one-week tops on Thursday.
- The underlying bullish tone continued weighing on the safe-haven JPY and remained supportive.
- Worries about rising COVID-19 cases in the UK acted as a headwind for the GBP and capped gains.
The GBP/JPY cross jumped to one-and-half-week tops during the early part of the European session, albeit quickly retreated few pips thereafter. Nevertheless, the cross, so far, has managed to hold in the positive territory and was last seen trading just below mid-151.00s.
The latest optimism that the continuous rise in new coronavirus cases won't derail a global economic recovery remained supportive of the underlying bullish sentiment in the financial markets. This, in turn, undermined demand for the safe-haven Japanese yen and was seen as a key factor that provided a modest lift to the GBP/JPY cross.
Concerns about the fast-spreading COVID-19 variant eased after the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech COVID-19 vaccine. Adding to this, the top US infectious disease expert, Dr Anthony Fauci, said that COVID-19 could be under control by early next year and further boosted investors' confidence.
Apart from this, Thursday's positive move could further be attributed to some technical buying on a sustained move beyond the 151.00 mark. That said, worries about the recent surge in coronavirus cases in the UK – which has been reporting over 30K cases per day – acted as a headwind for the British pound and capped gains for the GBP/JPY cross.
Meanwhile, the lack of any meaningful selling still favours bullish traders and supports prospects for additional gains in the absence of any major market-moving economic releases. A subsequent strength beyond the daily swing highs, around 151.60 region, will reaffirm the bullish bias and push the GBP/JPY cross further towards the 152.00 mark.
Technical levels to watch
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