After an initial dip to mid-144.00s, the GBP/JPY cross regained traction and held near 5-month tops around 145.10-15 band.
Although today’s stronger-than-expected release of UK construction PMI, which added to yesterday’s upbeat manufacturing PMI, failed to provide an additional boost but remained supportive of the pair’s near-term upward trajectory.
Meanwhile, receding geopolitical tensions, and improving investors’ risk-appetite, continues to weigh on the Japanese Yen’s safe-haven appeal and hence, broader market risk sentiment has been an exclusive driver of the pair’s up-move closer to yearly tops.
However, the prevalent cautious environment, ahead of the much-awaited FOMC decision, held investors’ from placing any fresh bets and has led to range-bound subdued price-action around the key 145.00 psychological mark.
Technical levels to watch
Sustained momentum above the 145.00 handle is likely to confront resistance at yearly tops near 145.40 region, above which a fresh leg of up-move is likely to lift the cross towards 145.75 intermediate resistance ahead of the 146.00 handle.
On the flip side, a follow through retracement below mid-144.00s is likely to accelerate the slide towards the 144.00 handle before the cross eventually corrects to 143.40 horizontal support.