GBP/JPY consolidating around 132.00, near-term recovery trend seems intact

After seesawing between tepid gains and minor losses, the GBP/JPY cross finally seems to have stabilized around 132.00 handle.

A broadly weaker greenback is seen boosting the British Pound and the Japanese Yen. Of late, the pair has benefitted from incoming UK economic data that has failed to provide evidence of immediate post-Brexit economic fallout. Adding to this, the prevalent risk-on sentiment, as depicted by buoyant European equity markets, is denting the safe-haven assets and providing some bullish impetus to the cross.

From technical perspective, the cross has been consolidating its break-out above a short-term descending trend-channel. A further boost in the upbeat sentiment surrounding the British Pound accompanied with improving investor risk appetite would assist the cross to build on to its break-out momentum and extend its near-term recovery trend.

Technical levels to watch

A strong follow through buying interest above 132.00 handle should assist the pair immediately towards 132.50 and 133.00 intermediate resistance before the cross heads towards testing its next major resistance near 133.75-80 area.

Conversely, reversal from current resistance level, and a subsequent break below 131.30 (session low support), might now force the cross to break below 131.00 handle and head towards 130.65-60 horizontal support. A convincing drop below 130.65-60 support might continue exerting selling pressure and drag the cross back towards 130.00 psychological mark support.