GBP/JPY taps 149.00 mark, highest since July 17

Haresh Menghani FXStreet

• Upbeat UK macro data/Brexit optimism continues to underpin GBP.
• A strong rally in US equities weigh on JPY and remained supportive.

The GBP/JPY cross continued scaling higher to fresh two-month tops, with bulls now looking to build on the positive momentum beyond the 149.00 handle.

The British Pound regained strong positive traction on Thursday and got an additional boost from upbeat UK monthly retail sales data. This against the backdrop of yesterday's hotter-than-expected UK consumer inflation figures and renewed Brexit optimism kept pushing the cross higher through the early North-American session.

The positive momentum seemed largely unaffected by some cautious Brexit comments by the European Council President Donald Tusk, saying that Chequers framework for economic cooperation is not acceptable and talks are unlikely to continue in November without a clear solution on Irish border.

Adding to this, German Chancellor Angela Merkel was noted saying that we need substantial progress on Brexit by October and there is still ‘much work to be done’ on future trade relations post-Brexit.

Bullish traders even shrugged off the UK PM Theresa May's latest comments on preparation for a no-deal Brexit scenario, while a strong rally in the US equity markets dented the Japanese Yen's safe-haven status and remained supportive of the ongoing upsurge to the highest level since July 17.

Technical levels to watch

Momentum beyond the 149.00 handle could get extended towards July monthly highs resistance near the 149.30 region, above which the cross seems all set to aim towards reclaiming the key 150.00 psychological mark.

On the flip side, immediate support is now pegged near mid-148.00s, which if broken might prompt some long-unwinding pressure and drag the cross back below the 148.00 mark towards testing 147.75-70 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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