GBP/JPY clings to strong gains above 142.00 mark

Haresh Menghani FXStreet

The GBP/JPY cross retreated from 4-day highs but has still managed to hold in positive territory for the fourth consecutive session, above the 142.00 handle.

The cross built on last week's sharp recovery move from sub-140.00 level and the up-move got an additional boost from the latest news that the Conservatives and DUP have reached a formal agreement to allow PM Theresa May to maintain a minority government.

Adding to this, a fresh wave of global risk on trade was seen weighing on the Japanese Yen's safe-haven appeal and further collaborated to the pair's strong up-move back above the 142.00 handle.

However, lack of strong follow through GBP buying interest failed to provide any fresh bullish impetus, with the cross holding within last week's broader trading range and the broader market risk-sentiment acting as an exclusive driver through mid-European session on the first trading day of a new week.

• GBP underwent correction in the light of the difficulties faced by May - Natixis

Technical levels to watch

Any further up-move is likely to confront resistance near mid-142.00s, above which a fresh bout of short-covering has the potential to lift the cross beyond the 143.00 handle towards its next resistance near 143.45-50 region.

On the downside, a follow through retracement below the 142.00 mark is likely to drag the cross back towards session lows support near 141.50 region en-route its next support near 141.10-141.00 area.

Author

Haresh Menghani

FXStreet

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

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