GBP/JPY rallies to over 1-week high, beyond mid-134.00s

• GBP/JPY reversed an early dip and turned higher for the second straight session.
• The risk-on undermined the JPY’s safe-haven demand and remained supportive.
• The UK PM Spokesman’s latest update provided an additional boost to the GBP.

The GBP/JPY cross built on its goodish intraday positive move and spiked to over one-week tops, around the 134.65 region in the last hour.

A combination of supporting factors assisted the cross to gain traction for the second consecutive session on Tuesday and rally around 175 pips from the Asian session swing lows to sub-133.00 levels.

The British pound witnessed some selling during the early trading action on Tuesday after the UK Prime Minister Boris Johnson was moved to intensive care after his coronavirus symptoms worsened.

A solid recovery in the global risk sentiment, amid signs that the pandemic may be reaching its peak, undermined the Japanese yen’s safe-haven demand and extended some initial support to the cross.

Meanwhile, the latest leg of a sudden pick up over the past hour or so came in reaction to the UK PM spokesman’s update that Johnson is not on a ventilator and is receiving standard oxygen treatment.

The spokesman further added that the PM remains in good spirits and has not been diagnosed with pneumonia nor is required mechanical ventilation or non-invasive respiratory support.

The cross has now moved to the top end of a near two-week-old trading range. Hence, some follow-through buying might be seen as a key trigger for bullish traders and set the stage for additional gains.

Technical levels to watch