GBP/JPY extends gains to 143.00

Improved risk sentiment following upbeat China data added to the bearish tone around Yen and pushed the GBP/JPY cross higher to 143.00 handle.

Bullish engulfing pattern on weekly chart

Sharp gains seen this week have led to a formation of the bullish engulfing pattern on the weekly chart. At 143.00 the cross is trading at least 1250 pips higher than the weekly opening rate of 130.13.

The sharp gains have been triggered by the technical recovery in GBP and the fall in the Yen due to speculation of fiscal easing in Japan. The gains witnessed today are due to risk-on in the markets due to better-than-expected second quarter China GDP and monthly industrial production and retail sales data release.

GBP/JPY Technical Levels

Acceptance above 143.00 (zero figure) could yield a rally to 144.36 (50% of 160.12-128.60). A break higher would expose June 16 low of 145.39. On the other hand, a failure to sustain above 142.08 (38.2% of 163.89-128.60) would open doors for a re-test of 140.16 (Asian session low), under which losses could be extended to 139.01 (June 29 high).