GBP/JPY consolidating around 133.00 supported by Brexit deal hopes

• GBP/JPY steady around 133.00 as Brexit fears ease.
• Boris Johnson eases lockdown restrictions and boosts hopes of economic recovery.
• Concerns about a second coronavirus wave keep the pound’s recovery limited.

The GBP/JPY has remained moving within a tight range between 132.90 and 133.50 with the pound somewhat firmer on Thursday. Investors’ hopes of a more constructive approach to Brexit negotiations and the easing of COVID-19 restrictions in the UK are offering some support to a vulnerable GBP.

Brexit hopes support the pound

The pound has trimmed losses against the euro and the US dollar on Thursday, with the investors welcoming Brussels’ willingness to strike a compromise on the sensitive issue of the “level playing field” rules for businesses, which might facilitate a breakthrough in the negotiations. Furthermore, UK PM Boris Johnson has announced the easing of lockdown restrictions, boosting hopes of economic recovery.

On the negative side, however, lingering concerns about the global increase of coronavirus infections and the potential impact of new lockdown on the incipient recovery are keeping pound’s recovery in check

Technical analysis

At the moment, the pair is hovering above 132.70/80 (Intra-day low June 24 low), below here, next support levels might be at 131.80 (June 22 low) and 130.65 (May 22 low). On the upside, immediate resistance lies at 133.60 (intra-day high) and above here, 134.00 (June 23 high) and 135.11 (intra-day level)