- The recent Brexit optimism continues to underpin the British Pound.
- Bulls remain in full control near multi-week tops, above mid-134.00s.
The GBP/JPY cross continued gaining positive traction for the fifth consecutive session on Friday – also marking its seventh day of strong positive move in the previous eight – and climbed to fresh multi-week tops in the last hour.
The overnight bounce from 50% Fibo. level of the 137.80-126.54 downfall and a subsequent close above the 133.00 handle was seen as a key trigger for bullish traders and prompted some strong follow-through buying on Friday.
This coupled with the fact that the cross has now broken through 61.8% Fibo. level resistance support prospects for an extension of the recent recovery move from multi-year lows amid receding fears of a no-deal Brexit on Oct. 31.
From current levels, the cross might now aim towards surpassing the key 135.00 psychological mark and test its next major hurdle near mid-135.00 (100-day SMA), though near-term overbought conditions might keep a lid on any runaway rally.
On the flip side, the 134.00 round figure mark now seems to protect the immediate downside, which if broken might trigger some profit-taking move and accelerate the slide further towards mid-133.00s (61.8% Fibo. level).
GBP/JPY daily chart