GBP/JPY hovers near four-month high

GBP/JPY hovers just below the four-month high of 140.34 on the back of Pound’s outperformance and the relentless JPY selling amid the risk-on action in the markets.

On track for a fifth consecutive weekly gain

The cross was last seen trading just above 140.00 handle, which is well above the weekly opening price of 137.13.

The data calendar is light today. Meanwhile, UK GDP figure would be released tomorrow. Across the pond, there is little on the calendar that could torpedo the risk-on rally.

Moreover, a weak UK GDP release may not hurt the Pound, given the prospects of low growth in the post referendum period has already been priced-in. Thus, a fifth consecutive weekly gain appears a done deal.

GBP/JPY Technical Levels

A break above the psychological level of 141.00 could see the pair test supply around 141.61 (23.6% of 2015 high – 2016 low). A violation there would expose 142.00. On the lower side, a failure to hold above 140.00 could help technical correction gather pace. Thus, spot may drift lower to 139.00 – 138.85 (Aug high).