GBP/JPY inches back closer to multi-year tops, around 152.00 mark
- GBP/JPY regained positive traction on Monday and climbed back closer to near three-year tops.
- The upbeat market mood undermined the safe-haven JPY and remained supportive of the uptick.
- A subdued GBP price action did little to impress bulls or provide any additional boost to the cross.
The GBP/JPY cross climbed back closer to near three-year tops, with bulls making a fresh attempt to build on the momentum beyond the 152.00 mark.
Following the previous session's two-way price moves, the cross managed to regain positive traction on the first day of a new trading week amid an offered tone surrounding the safe-haven Japanese yen. The prevalent risk-on mood – as depicted by a positive tone around the equity markets – was seen as a key factor weighing on traditional safe-haven assets.
The impressive pace of COVID-19 vaccinations and the passage of a massive US fiscal stimulus package have been fueling expectations for a strong global economic recovery from the pandemic. This, in turn, remained supportive of the underlying bullish sentiment in the financial markets and continued boosting investors' appetite for perceived riskier assets.
On the other hand, the British struggled to gain any meaningful traction and was seen oscillating in a narrow trading band, which did little to provide any meaningful impetus to the GBP/JPY cross. Nevertheless, some follow-through buying beyond Friday's swing high, around the 152.25 region should pave the way for an extension of the recent strong bullish momentum.
That said, extremely overbought RSI on the daily chart might hold bulls from placing fresh bets and cap gains for the GBP/JPY cross. In the absence of any relevant market moving economic releases, the broader market risk sentiment will continue to play a key role in influencing the safe-haven JPY and produce some short-term trading opportunities around the GBP/JPY cross.
Technical levels to watch