GBP/JPY retreats from daily tops, still well bid above mid-138.00s

The GBP/JPY cross faced rejection near the 139.00 round-figure mark and quickly retreated around 40-45 pips during the early North American session.

Following the previous day's modest pullback, the cross managed to regain positive traction on Wednesday and moved back to the top end of its weekly trading range. The intraday uptick of around 100 pips was supported by the emergence of some fresh buying around the British pound and the upbeat market mood.

The GBP bulls largely shrugged off concerns about the second wave of coronavirus infections and fears of a no-deal Brexit, instead took cues from the heavily offered tone surrounding the US dollar. This coupled with a strong rally in the global equity markets undermined the safe-haven Japanese yen and remained supportive.

Despite the supporting factors, the GBP/JPY cross struggled to make it through the 139.00 mark, warranting some caution before placing any aggressive bullish bets. Investors might refrain from placing any aggressive bets, rather prefer to wait on the sidelines ahead of the Bank of England's policy decision on Thursday.

This makes it prudent to wait for some follow-through strength beyond last Friday's high, around the 139.20 region, in order to confirm any near-term bullish bias. The GBP/JPY cross might then aim to surpass June monthly swing highs resistance near the 139.75 region and accelerate the momentum towards the key 140.00 psychological mark.

Technical levels to watch