GBP/JPY clings to gains above 132.00 handle

The GBP/JPY cross extended its recovery momentum for the third consecutive session and is now building on to its gains above 132.00 handle. 

Currently trading at 6-day high around 132.25-30 band, an offered tone around the Japanese Yen, on the back of OPEC deal-led optimism, has been the sole driver of the pair's up-move on Thursday. 

In a meeting in Algeria, major oil producers reached to an agreement to cap output in order to lift oil prices. The decision boosted investor risk appetite and dented the safe-haven appeal of the Japanese Yen, assisting the pair to build on to its recovery momentum from a multi-week low of 129.63 touched during early part of the week.

In absence of any major economic releases from UK, the prevalent risk sentiment would determine the safe-haven demand of the Japanese Yen and provide impetus for the next leg of move for the cross.

Technical level to watch

From current levels, 132.75-80 area is likely to act as immediate resistance above which the pair is likely to aim towards testing an important confluence resistance near 133.90-134.00 region with 133.50 level acting as intermediate resistance. 

Meanwhile on the downside, 132.00 handle now turns immediate support. Weakness below 132.00 mark seems to be short-lived and is likely to be bought into near 131.80-75 support, which if broken could accelerate the slide back towards 131.00-130.90 support area.