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GBP/JPY hits fresh YTD tops, eyeing to reclaim 145.00 mark

  • GBP/JPY quickly reversed an early dip and turned positive for the third straight day.
  • The British pound got a modest lift following the release of UK Manufacturing PMI.
  • The JPY trimmed early gains – led by coronavirus worries – and remained supportive.

The GBP/JPY cross jumped to fresh YTD tops on the last trading day of the week, with bulls now eyeing a move beyond the key 145.00 psychological mark.

Following an early European session dip to the 143.75-70 region, the cross attracted some aggressive buying interest and turned positive for the third consecutive session on Friday. The uptick was primarily led by a modest rebound in the British pound, which gained some traction in reaction to upbeat UK Manufacturing PMI.

GBP/JPY supported by a combination of factors

According to IHS Markit/CIPS data, the UK manufacturing sector activity expanded at its fastest rate in 10- months during February. The gauge jumped to 52.8 from January's final reading of 50.1. This helped offset a slight disappointment from the Services PMI, falling to a two-month low level of 53.3, and provided a modest lift to the British pound.

On the other hand, the Japanese yen trimmed a part of its early strong gains – led by fresh worries over the outbreak of the deadly coronavirus – and remained supportive. The cross has now rallied over 100 pips and a subsequent strength beyond the 145.00 mark should set the stage for an extension of the bullish momentum witnessed over the past two weeks.

Technical levels to watch

 

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