GBP/JPY jumps above 140.00 mark, back closer to multi-month tops
- A combination of factors assisted GBP/JPY to gain some strong positive traction on Thursday.
- Hopes for a last-minute Brexit deal provided a strong lift to the GBP and remained supportive.
- COVID-19 vaccine optimism undermined the safe-haven JPY and contributed to the bid tone.
The GBP/JPY cross surged past the key 140.00 psychological mark and climbed back closer to near three-month tops set in the previous day.
Ireland’s Foreign Minister Simon Coveney said this Thursday that there was a good chance that Britain and the European Union would secure a trade deal in the next few days. Separately, the British Education Secretary Gavin Williamson commented that the UK and EU are making good progress on the Brexit trade deal negotiations.
This, in turn, revived hopes for a last-minute Brexit deal and provided a goodish lift to the British pound. The GBP/JPY cross built on the overnight rebound from sub-139.00 level and largely shrugged off pessimism led by comments from an EU diplomat, saying that issues such as the level playing field and fisheries are still outstanding.
On the other hand, the first approval of a vaccine for the highly contagious coronavirus disease undermined the Japanese yen's relative safe-haven status against its British counterpart. This was also cited as another factor driving the GBP/JPY cross, which has now moved well within the striking distance of the 140.35-45 supply zone.
It will now be interesting to see if bulls are able to capitalize on the momentum or opt to take some profits off the table at higher levels. Nevertheless, the incoming Brexit-related headlines will continue to play a key role in influencing the GBP price dynamics and produce some meaningful trading opportunities around the GBP/JPY cross.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
