GBP/JPY rallies back closer to multi-week tops, eyeing a move beyond 137.00 mark

The GBP/JPY cross refreshed daily tops during the early European session, with bulls making a fresh attempt to build on the momentum beyond the 137.00 mark.

The cross built on the previous session's goodish intraday bounce from the key 135.00 psychological mark and gained some strong follow-through traction on the first day of a new trading week. The British pound kicked off the new week on a positive note amid the latest optimism over a possible post-Brexit trade deal between the EU and UK.

It is worth recalling that the UK Prime Minister Boris Johnson and the European Commission President Ursula von der Leyen agreed in a phone call on Saturday to intensify Brexit talks to close significant gaps. Given the lack of progress in the latest round of Brexit negotiations, the development extended some support to the sterling.

The sterling got an additional boost following the release of the UK Services PMI, which was finalized at 56.1 for September as against the 55.1 preliminary estimate. Adding to this, the prevalent upbeat market mood undermined the safe-haven Japanese yen and further contributed to the GBP/JPY pair's strong intraday positive move.

The global risk sentiment got a strong lift on the back of positive news about the US President Donald Trump’s coronavirus infection. Doctors said that Trump has responded well and could return to the White House on Monday, easing some of the political uncertainty that spooked investors and triggered the risk-off mood on Friday.

From a technical perspective, a sustained move beyond the 137.00 mark will be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move. The GBP/JPY cross might then surpass an intermediate resistance near the 137.55-60 region and aim towards reclaiming the 138.00 round-figure mark.

Technical levels to watch