The GBP/JPY cross prolonged its strong bullish momentum and is now placed at the highest level since late Jan., around mid-144.00s.
Spot reversed early losses to sub-144.00 level and regained traction amid an offered tone surrounding the Japanese Yen. Meanwhile, a modest rebound in the GBP/USD major, following an initial weakness led by renewed worries of a possible ‘hard Brexit’ scenario after EU leaders endorsed stiff divorce terms for Britain at a Brussels summit on Saturday, further collaborated to the pair’s up-move on the first trading day of the week.
With markets now looking beyond Friday’s disappointing UK Q1 GDP growth numbers, and Brexit headline regaining spotlight, it would be interesting to see if the cross is able build on to the momentum and break through 144.60-70 important hurdle, held since early January.
However, with European markets closed in observance of May Day, broader sentiment surrounding the Japanese Yen would remain an exclusive driver of the pair’s movement on Monday.
Technical levels to watch
On a sustained move beyond 144.60-70 hurdle, the cross is likely to aim towards conquering the key 145.00 psychological mark and head towards testing its next resistance near 145.75 level. On the flip side, the 144.00 handle now seems to protect immediate downside, below which the cross is likely to accelerate the slide towards 143.35-30 intermediate support en-route 143.00 round figure mark.