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GBP/JPY trims early gains, retreats from 147.00 handle

The GBP/JPY cross extended its recovery move from near two-week lows touched on Wednesday and built on previous session's strong gains, albeit failed to extend the up-move further beyond the 147.00 handle.


The cross trimmed some of its early gains after Reuters reported comments from BOJ sources that the Japanese central bank is likely to raise its GDP growth forecasts at its upcoming meeting on July 20. Sources were also quoted saying that the yield target in Japan would stay in place for quite some time as it's taking longer than expected for inflation to pick up and failed to provide any additional boost to the Japanese Yen. 


   •  Sources: BOJ to raise growth forecasts, cut inflation outlook next week - RTRS


Meanwhile, the ongoing strong recovery witnessed around the GBP/USD major remained supportive of the pair's tepid up-move for the second consecutive session. The cross, however, lacked any strong follow through momentum amid prevalent cautious environment, which tends to benefit the Japanese Yen's safe-haven appeal.


In absence of any major market moving economic releases from the UK, the cross remains at the mercy of broader market risk sentiment and repositioning trade ahead of the key US macro data, due for release later during the NA session.


Technical levels to watch


Currently trading around 146.70-65 region, immediate support is pegged near 146.35 level, below which the cross is likely to break below the 146.00 handle towards testing 145.80-75 horizontal support.


On the flip side, 146.90-147.00 region remains immediate supply zone, which if cleared could lift the cross back towards 147.75-80 region (multi-month highs touched on Tuesday) ahead of yearly tops resistance near 148.00-148.10 area.

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