GBP/JPY recovery capped below 133 handle

The recovery in the GBP/JPY cross faltered just below 133 handle, sending the rate back towards daily lows on the back of persistent bids seen around the Japanese yen.

GBP/JPY trades below major DMAs

Currently, GBP/JPY now trades 0.10% higher at 132.82, attempting recovery from a dip to 132.69. The GBP/JPY cross defends mild gains in early Europe, with the recovery having lost steam amid renewed JPY buying, as investors appear to have shrugged-off the latest jawboning by the Japanese officials in a bid to stem yen’s sharp rise.

The cross is seen consolidating the downside after the BOE-induced steep losses, which knocked-off the rate more-than 200-pips lower. The pound slumped across the board after the BOE cut the key rate to 0.25% for the first time in seven years and extended its asset-purchase program.

GBP/JPY Levels to consider 

The pair has an immediate resistance at 133.48 (daily pivot), above which 134.02 (5-DMA) would be tested. On the flip side, support is seen at 132.56 (post-BOE) that at 131.68 (daily S1).