GBP/JPY climbs further beyond 129.00 handle, fresh weekly tops

The overnight Brexit optimism continues to underpin the British Pound.
The reaction to Wednesday’s softer UK PMI turns out to be short-lived.
Fading safe-haven demand weighed on the JPY and remains supportive.

Haresh Menghani FXStreet

The GBP/JPY cross quickly reversed the UK services PMI-led dip and climbed to fresh weekly tops - around the 129.30 region in the last hour.

The cross gained strong follow-through traction through the early European session on Wednesday and built on the previous session's solid recovery of over 130-pips - supported by the fact that the UK House of Commons passed a motion aimed at taking control of the daily agenda from the government.

Brexit optimism offset softer UK data

The cross did witness an intraday pullback following the disappointing release of UK services PMI, which fell to 50.6 in August from the previous month's final reading of 51.4, though the downtick turned out to be short-lived amid receding fears over Britain's exit from the EU without a deal.

It is worth mentioning that the latest UK political development is now expected to lead to a vote forcing the government to request another three-month extension to the Brexit deadline, though looming risk of a snap election in the UK might keep a lid on any strong follow-through positive momentum.

Meanwhile, a fresh wave of global risk-on trade - as depicted by a strong rally in equity markets - was seen weighing on the Japanese Yen's perceived safe-haven status and remained supportive of the pair's ongoing recovery further beyond the 129.00 round figure mark.

Technical levels to watch

GBP/JPY

Overview
Today last price	129.16
Today Daily Change	1.14
Today Daily Change %	0.89
Today daily open	128.02

Trends
Daily SMA20	128.9
Daily SMA50	132.19
Daily SMA100	136.36
Daily SMA200	139.94

Levels
Previous Daily High	128.26
Previous Daily Low	126.67
Previous Weekly High	130.39
Previous Weekly Low	128.21
Previous Monthly High	132.56
Previous Monthly Low	126.54
Daily Fibonacci 38.2%	127.28
Daily Fibonacci 61.8%	127.65
Daily Pivot Point S1	127.04
Daily Pivot Point S2	126.07
Daily Pivot Point S3	125.46
Daily Pivot Point R1	128.63
Daily Pivot Point R2	129.24
Daily Pivot Point R3	130.21

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD advances to three-month peak beyond 1.3600

GBP/USD extends its daily rally and trades at its highest level since mid-May above 1.3600. The US Treasury Department decision to double the sice of liquidity support buyback operations for longer-dated nominal coupon securitiez weighs heavily on the US Dollar and helps the pair push higher. Earlier in the day, the data from the UK showed that annual Consumer Price Index (CPI) inflation picked up to 2.9% in July, meeting estimates, while core CPI rose by 2.6% YoY in July versus 2.5% expected.

EUR/USD surges to 11-week high above 1.1650 after US Treasury announcement

EUR/USD gathers bullish momentum and trades at its highest level since early June above 1.1650 on Wednesday. The US Dollar stays under heavy bearish pressure after the US Treasury announced that it will increase the size of liquidity support buyback operations for longer-dated nominal coupon securities. Later in the day, investors will scrutinize FOMC Minutes for fresh clues on policy outlook.

Gold climbs above $4,500 as US Dollar, yields fall

Gold price rises to around $4,520 during the early Asian session on Thursday. The precious metal surges to the highest since early June amid the weakening US Dollar after the US Treasury Department stepped in to provide relief to bond markets.

Australia unemployment rate expected to hold at 4.4% in July

Australia will release the July monthly employment report on Thursday at 01:30 GMT. Ahead of the announcement, analysts anticipate a modest 15K increase in job creation, while the Unemployment Rate is expected to remain steady at 4.4%.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.