GBP/JPY finds takers around 5-DMA

Having recovered from the 5-DMA level of 128.00 the GBP/JPY cross now trades around 128.20 levels.

Focus on UK manufacturing PMI

Overall demand for the British Pound could be influenced by the UK manufacturing PMI due for release in the European session. The UK CBI data released a week ago had shown a rise in export orders to the highest level in two and a half years.

Consequently, we could see a better-than-expected UK manufacturing PMI print. Markets expect the number to come-in at 54.5, which is slightly lower than the September figure of 55.4.

It remains to be seen if the strong print boosts demand for the British Pound, given the caution ahead of the BOE rate decision and Quarter Inflation Report (QIR) release on Thursday.

GBP/JPY Technical Levels

A break above previous day’s high of 128.50 would open doors for 129.07 (Aug 16 low). A violation there could yield 130.00 (zero figure). On the other hand, a breakdown of support at 128.10 (23.6% of 138.83-124.79) would expose 127.59 (10-DMA), under which the descending trend line (drawn from Sep high and Oct high) support of 126.77 would come into play.