GBP/JPY holding gains to 137.50 after UK construction PMI

The GBP/JPY cross maintained its bid tone but has retraced few pips from session high and is currently trading around mid-137.00s following the release of UK construction PMI print. 

The Markit/CIPS UK construction PMI came-in at 49.2 for August, better-than 46.1 expected and July's 45.9. As compared to yesterday's surprisingly stronger-than-expected manufacturing PMI, the cross had a muted reaction to today's release but has held on to its strong gains close to Thursday's 5-week high level of 138.00. 

Meanwhile, the Japanese Yen remained well offered across the board on rising expectations of additional monetary stimulus by BoJ, assisting the cross to head towards posting third consecutive week of gains. 

Next in focus would be the US monthly jobs report (NFP), which would provide fresh impetus to both, the British Pound and the Japanese Yen, and eventually drive the GBP/JPY cross. 

Technical levels to watch

From current levels, sustained strength above 137.85 has the potential to lift the pair beyond 139.00 handle towards testing July 29 swing high resistance near 139.30 level in the near-term. On the flip side, weakness back below 137.00 handle, leading to a break below session low support near 136.85 level, could get extended but is likely to be short-lived around an important resistance break-point turned support near 136.00 round figure mark.