GBP/JPY rallies nearly 200-pips from lows, back closer to 142.00 mark

The GBP/JPY cross staged a goodish recovery from sub-140.00 level and recovered majority of previous session's corrective losses from near two-week highs.

With markets looking past overnight dovish comments by BOE Governor Mark Carney, suggesting no hurry to raise interest rates any time soon, the BOE Chief Economist Andy Haldane's latest signal to vote for a rate-hike was seen driving the British Pound higher across the board.

Haldane's switch raised prospects of a 4-4 split vote at the next BOE meeting in August and intensified the uncertainty for the GBP traders, amid political uncertainty and Brexit negotiations, eventually triggered a short-covering rally across GBP crosses. 

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Adding to this, a slight improvement in investors' risk-appetite, as depicted by a recovery in the European equity markets, further weighed on the Japanese Yen's safe-haven appeal and collaborated to the pair's strong up-move to session tops near 141.70-75 region.

In absence of any major market moving economic releases, broader market sentiment surrounding the British Pound and investors' risk appetite would continue to act as key driver of the pair's momentum on Wednesday.

Technical levels to watch

Bulls would be eyeing to decisively break through the 142.00 handle, above which a fresh bout of short-covering could boost the cross back towards mid-142.00s before eventually lifting it further towards 142.80-90 horizontal resistance. 

On the flip side, any pull-back from higher levels now seems to find immediate support near 141.35-30 area, which is closely followed by support at the 141.00 round figure mark. Weakness back below the said handle would turn the cross vulnerable to head back towards retesting the key 140.00 psychological mark.