GBP/JPY continues scaling higher, inching closer to yearly tops

Haresh Menghani FXStreet

After Monday’s brief pause, the GBP/JPY cross regained traction and continued scaling higher to hit fresh multi-month highs near the 144.70-75 region.

The prevalent risk-on environment, as depicted by positive trading sentiment around European equity markets, which tends to dent the Japanese Yen's safe-haven demand, remained supportive of the strong bid tone surrounding the cross.

Adding to this, today's better-than-expected UK manufacturing PMI, coming-in at 57.3 for April as compared to previous month's 54.2 and 54.0 expected, provided an additional boost to the pair's ongoing bullish trajectory closer to yearly tops touched in Jan.

GMT	Event	Vol.	Actual	Consensus	Previous
Tuesday, May 02
08:30	GBP Markit Manufacturing PMI		57.3	54.0	54.2

GBP outlook still looks constructive – TDS

However, renewed worries of a possible 'hard Brexit' scenario, after the EU leaders endorsed stiff divorce terms for Britain at a Brussels summit on Saturday, might contribute towards capping the cross in the near-term.

Technical levels to watch

A follow through buying interest has the potential to continue boosting the cross further beyond the key 145.00 psychological mark towards testing its next resistance near 145.75 level. On the flip side, any profit taking move now seems to find immediate support near the 144.00 handle, below which the cross is likely to accelerate the slide towards 143.35-30 intermediate support en-route 143.00 round figure mark.

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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