“¢ The recent Brexit optimism continues to underpin the British Pound.
“¢ Fading safe-haven demand weighs on JPY and remained supportive.
The GBP/JPY cross continued gaining positive traction for the fifth consecutive session and climbed to three-week tops in the last hour.
The cross built on its recent strong rebound from seven-week lows, with a combination of supporting factors further assisting to extend the positive momentum further beyond the very important 200-day SMA.
The latest optimism over reaching a Brexit deal by the end of the year, despite denial by the EU, was seen as one of the key factors underpinning the British Pound and driving the cross higher.
Adding to this, a mildly positive tone around equity markets weighed on the Japanese Yen’s safe-haven status and further collaborated to the pair’s ongoing positive momentum beyond the 148.00 handle.
In absence of any major market moving UK economic releases, the incoming Brexit headlines might continue to influence sentiment surrounding the British Pound and produce some meaningful trading opportunities.
Apart from this, the US midterm elections might infuse a fresh bout of volatility across global financial markets, which might eventually derive the Japanese Yen’s safe-haven demand and move the cross.
Technical levels to watch
Immediate resistance is pegged near the 148.45-50 horizontal resistance, above which the cross is likely to surpass the 149.00 handle and test the 149.35-40 supply zone. On the flip side, any meaningful retracement back below the 148.00 handle now seems to find support near the 147.45-40 region (200-DMA), which if broken might prompt some fresh selling and turn the cross vulnerable to retest sub-147.00 level.
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