- The cross regains some traction on slightly better-than-expected UK manufacturing PMI.
- A sustained move above 100-hour SMA support prospects for additional intraday gains.
A combination of supporting factors helped the GBP/JPY cross to regain some positive traction on Tuesday and climb to near one-week tops during the early European session. The British Pound picked up some pace following the release of slightly better-than-expected UK manufacturing PMI. Adding to this, the prevalent risk-on mood continued weighing on the Japanese Yen's perceived safe-haven status and remained supportive.
Bulls, however, struggled to capitalize on the intraday uptick and the cross once again failed to find acceptance above 23.6% Fibonacci level of the 135.75-132.31 recent leg down. Meanwhile, the fact that the cross has moved back above 100-hour SMA for the first time in over a week or so, the intraday bias seems tilted in favour of bullish traders and support prospects for a further near-term appreciating move.
Moreover, technical indicators on the 1-hourly chart have been gaining positive traction and also recovered from the bearish territory on 4-hourly/daily charts, adding credence to the constructive set-up. Hence, any dips back below the 133.00 handle might be seen as an opportunity to initiate some fresh bullish positions for an eventual move towards testing the 133.60-65 confluence barrier - comprising of 200-hour SMA and 38.2% Fibonacci level.
GBP/JPY 1-hourly chart
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