- GBP/JPY tests short-term trendline and key resistance.
- UK data boosted the pound that among majors was the best performer.
On a quiet day, the pound rose across the board supported by UK PMI Service sector data that showed better-than-expected numbers. More upbeat data increased rate hike expectation from the Bank of England and the pound.
GBP/JPY is about to post the second daily gain in-a-row and continues to move with an upside bias. At the same time, the pair remains below the 146.30 resistance area.
The upside pressure could remain intact as long as the pair holds on top of 145.50 (uptrend line). In order to clear the way to more gains, the pound needs to break and hold on top of the 146.30 area, a strong resistance that capped the upside several times recently. A break higher would target 146.60 and above, 147.00.
On the fundamental side, the latest round of UK economic data supports further gains but Brexit and political concerns remain elevated. The yen on Wednesday held steady amid low volume (Wall Street closed – US Independence day). Lower US yields pushed the Japanese currency to the upside on Tuesday. The bond market continues to be a relevant driver of the yen in the very short-term. So FOMC minutes to be released on Thursday could have an impact on the GBP/JPY pair.
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