“¢ British Pound surges across the board following the releases of UK services PMI.
“¢ Fading safe-haven demand weighs on the JPY and provides an additional boost.
“¢ Improving UK macro data raises prospects for an extension of the recent recovery move.
The GBP/JPY cross caught some fresh bids on Tuesday and jumped back closer to the 147.00 handle, or 1-1/2 week tops, post-UK PMI print.
The British Pound appreciated across the board after the latest UK services PMI bettered expectations, coming in at 54.0 for May, and added to the recent slew of positive UK macro data – manufacturing and construction PMI.
Meanwhile, improving investors’ risk-appetite, as depicted by positive trading sentiment around European equity markets, did little to boost the Japanese Yen’s safe-haven appeal and remained supportive of the pair’s strong bid tone.
Today’s bullish up-move could also be attributed to some technical buying from an ascending trend-line support extending from Friday through lows touched on the first trading day of the week.
With today’s only scheduled UK economic data out of the way, improving market risk sentiment and a goodish pickup in the GBP demand should assist the cross to build on its recent recovery move from 6-1/2 month lows, set last Tuesday.
Technical levels to watch
A follow-through buying beyond the 147.00 handle has the potential to continue boosting the cross further towards 147.45-50 supply zone en-route the 148.00 round figure mark. On the flip side, the 146.20 area now becomes an immediate strong support to defend, which if broken might turn the cross vulnerable to slide back towards 145.40-35 intermediate zone en-route the key 145.00 psychological mark.
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