GBP/JPY rallies hard to hit fresh two-month tops near 147.75

Having peaked at two-month tops of 147.73, the cross in GBP/JPY took a breather and entered a phase of consolidation, as the bulls await the UK PM May’s speech due on cards later today.

GBP/JPY: 148 still on sight?

The cross rallied hard so far this Tuesday, as the sentiment around Cable was boosted by a sharp rebound in the UK’s retail volumes, as reflected by the  British Retail Consortium. The BRC said its measure of retail spending growth rose to 2.0% last month from 0.2% in May, above its average of 1.4% in the past six months.

Moreover, persistent broad based Yen weakness on divergent monetary policy outlooks between the Fed and BOJ, further fuelled the bullish run in the cross.

However, increased cautiousness ahead of the speeches by the BOE MPC members Haldane and Broadbent could keep the upside restricted. Meanwhile, the UK PM Theresa May’s speech on her first anniversary as a PM, will emerge the main risk event for the pound.

In her speech, Theresa May is expected to ask other parties to reach a consensus to secure a better Brexit deal.

Technical Levels

Higher side: 148/148.13 (round figure/ May tops), 148.50 (psychological levels), 148.80 (multi-month tops)

Lower side: 146.88 (daily low), 146.07 (classic S2/ Fib S3), 145.50 (key support)