GBP/JPY consolidates near 3-week tops, around 135.75 region

The GBP/JPY cross now seems to have entered a bullish consolidation phase and was seen oscillating in a range just below three-week tops set earlier this Thursday.

The cross prolonged its recent strong bullish momentum from sub-132.00 level and gained some follow-through traction for the third consecutive session. The momentum was exclusively sponsored by the prevalent bullish tone surrounding the British pound, which remained well supported by the UK government's £30 billion stimulus package.

It is worth recalling that the UK Chancellor Rishi Sunak presented mini-budget on Wednesday and announced various measures to create more jobs for young people and spur economic growth. Adding to this, the latest optimism over a possible breakthrough in the post-Brexit negotiations further underpinned sentiment surrounding the sterling.

This comes on the back of hopes of a sharp V-shaped global economic recovery, which, to a larger extent, offset worries over the ever-increasing coronavirus cases and remained supportive of the upbeat market mood. The risk-on flows weighed on the safe-haven Japanese yen and provided any additional boost to the GBP/JPY pair's positive move.

Meanwhile, technical indicators on the daily chart have just started moving into the bullish territory and support prospects for a further near-term appreciating move. However, oscillators on hourly charts are flashing slightly overbought conditions and seemed to be the only factor capping holding investors from placing aggressive bullish bets.

Technical levels to watch