GBP/JPY dips below 133.00 handle on profit-taking

Having posted a two-week high level of 133.30, the GBP/JPY cross witnessed some profit taking move and dropped to mid-132.00s before retracing few pips to currently trade around 132.75-80 band. 

Upbeat sentiment surrounding the British Pound has been driving the cross higher since the beginning of this week. The cross, however, seems to have stalled its three consecutive days of winning streak amid cautious sentiment surrounding equity market, which provided a minor boost to the safe-haven appeal of the Japanese Yen. 

A broad based greenback recovery, as measured by the overall US Dollar index, has led to a minor retracement in the GBP/USD major from a three-week high level and is exerting some selling pressure around the GBP/JPY cross. 

An empty UK economic calendar is unlikely to provide any fresh impetus and might limit volatility. However, sentiment surrounding equity markets will determine the safe-haven demand for the Japanese Yen and eventually provide some near-term momentum for the cross. 

Technical levels to watch

From current levels, 132.50 area might continue to act as immediate support, below which the pair is likely to drift back towards 132.00 round figure mark. Sustained weakness below 132.00 handle is likely to get extended towards 131.30, which if broken might drag the pair back below 131.00 handle, towards testing 130.65-60 horizontal support.

Meanwhile on the upside, bullish momentum back above 133.00 handle should now assist the pair to extend its near-term upward trajectory and head towards testing its next major resistance near 133.75-80 zone.