GBP/JPY peeps above 139 as post Brexit profit taking continues…

Unwinding of post Brexit GBP shorts continued in Asia, pushing the GBP/JPY to a session high of 139.48.

BOE looms

Bank of England (BOE) rate decision is due tomorrow. At the start of the week, there was a widespread belief that the central bank could cut rates this week. However, realization appears to have seeped into the markets that a rate cut move this week would be premature, given the bank would want to assess post Brexit data.

This may be adding to the recovery in the British Pound. The cross thus clocked a high of 139.48 before trimming gains to trade around 139.10 levels. The data docket across Europe and US is light; hence the pair is left at the mercy of the broader market sentiment.

GBP/JPY Technical Levels

The immediate hurdle is seen at 139.48 (previous day’s high), above which the cross could target 140.00 (zero figure) levels. A violation there could yield 140.64 (38.2% of 160.12-128.60). On the other hand, a breakdown of support at 138.00 (daily low) would expose 136.04 (23.6% of 160.12-128.60). Further slide could run into support at 134.21 (5-DMA).