GBP/JPY inching closer to weekly high

Haresh Menghani FXStreet

The GBP/JPY cross traded with minor gains for the third consecutive session but lacked any firm direction and was seen oscillating in a narrow band around 20-day SMA.

Currently trading around 128.25 region, the cross has moved within striking distance of weekly high level of 128.42 touched in the aftermath of better-than-expected UK GDP print released on Thursday. A minor recovery in the GBP/USD major has assisted the cross to trade with positive bias on Friday. This coupled with an offered tone around the Japanese Yen has been key factor supporting the pair's recovery trend during the course of current trading week.

With an empty UK economic docket, broader market risk sentiment, which would derive the safe-haven demand for the Japanese Yen, and the ongoing concerns of 'hard Brexit' would drive the cross from current levels.

From technical perspective, the cross tested 20-day SMA for the first time since mid-September and hence, seems more likely to extend its recovery trend in the near-term.

Technical levels to watch

A follow through buying interest above 128.40 (weekly high) should pave way for further recovery towards its next major resistance near 129.50 region with 129.00 round figure mark acting as intermediate hurdle.

On the downside, sustained weakness back below 128.00 handle could get extended towards 127.50 support area below which the cross seems to head back towards retesting sub-127.00 support near 126.85 region.

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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