GBP/JPY retreats, but remains well-bid near mid-140.00s after UK PMI
|Having posted a session high near 141.75 region, the GBP/JPY cross trimmed some of its strong gains, albeit maintained its strong bid tone just below mid-140.00s following UK manufacturing PMI
Spot prices failed to build on previous session’s recovery move from the very important 200-day SMA after the UK manufacturing PMI print fell short of market expectations and came-in at 54.6 for February. The reading was below consensus estimates pointing to a reading of 55.5 and worse than January's 55.9.
Despite of slightly weaker reading, the cross maintained its strong bid tone in wake of intense selling pressure around the Japanese Yen. The Japanese Yen remained on the back-foot through early European session amid reviving hopes for an imminent Fed rate-hike action at its meeting in two weeks, and has been an exclusive driver of the GBP/JPY pair's ongoing recovery move from the very important 200-day SMA support.
It, however, remains to be seen if the cross is able to hold / build on to the up-move amid renewed fears of another Scottish independence referendum. Hence, market participants would continue to closely track any fresh development / news that could act as a catalyst for the pair's next leg of directional move.
Technical levels to watch
Sustained move above 141.00 handle has the potential to lift the cross further towards 141.75-80 resistance area, with 141.35-40 area acting as intermediate resistance. Meanwhile on the downside, retracement back below 140.25 level would turn the cross vulnerable to break back below the 140.00 psychological mark and head towards retesting 200-day SMA support near the 139.00 handle.
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