GBP/JPY moves back above 138.00 mark, highest since June 9
|- GBP/JPY gains traction for the fifth consecutive session on Friday.
- The GBP bulls seemed unaffected by renewed lockdown in the UK.
- Receding demand for the safe-haven JPY remained supportive.
The GBP/JPY cross jumped to over 1-1/2-month tops during the mid-European session, with bulls now eyeing a move towards reclaiming the 138.00 round-figure mark.
The cross added to this week's positive move and gained some strong follow-through traction on Friday, marking the fifth consecutive day of a positive move. The uptick was supported by a combination of supporting factors – the strong bid tone surrounding the British pound and receding demand for the safe-haven Japanese yen.
The sterling maintained its bullish bias on the last trading day of the week and seemed rather unaffected by new restrictions on 4.3 million people in northwest England. The UK government imposed a tougher lockdown in Greater Manchester, parts of West Yorkshire and East Lancashire after the recent rise in new coronavirus cases.
On the other hand, a modest pickup in the US equity futures undermined demand for traditional safe-haven currencies, including the Japanese yen. This, in turn, provided an additional boost to the GBP/JPY cross and was seen as one of the key factors behind the latest leg of a sudden spike over the past hour or so.
From a technical perspective, the GBP/JPY cross has been trending higher along a one-month-old ascending channel. Given that the GBP has shown little signs of bullish exhaustion, the momentum should lift the cross towards the channel resistance, currently near the 138.60 region. Nevertheless, the cross remains on track to post strong gains for the second consecutive week, also marking the fifth week of a positive move in the previous six.
Technical levels to watch
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