GBP/JPY confined in range above 131.00 handle

Despite of last week's decent recovery of over 200-pips from multi-week lows near 129.00 handle, the GBP/JPY cross has failed to gain further traction but has managed to hold on to its gains above 131.00 level.

Currently trading near session high around 131.50 region, off session low, the pair initially weakened to 131.13 on reports that UK might invoke Article 50 of the Lisbon Treaty during the first half of 2017.

However, offered tone around the Japanese Yen, led by comments from BoJ governor Koruda that there is room for additional rate-cut, limited the downslide and confined the cross in a narrow trading range. 

Going forward, the pair seems more likely to continue with its range-bound move in absence of any fresh fundamental triggers, in-terms of economic releases.

Technical levels to watch

From current levels, a sustained strength above 132.00 immediate strong resistance would reinforce a short-term descending trend-channel break-out and is likely to assist the pair immediately towards 132.50 and 133.00 intermediate barriers en-route its next major resistance near 133.75-80 region. 

On the flip side, sustained weakness back below 131.00 handle, the pair is likely to immediately drop towards 130.65-60 horizontal support. A follow through selling pressure seems to drag the cross back towards retesting 130.00 psychological mark, which if broken might negate the break-out and turn the pair vulnerable to resume its near-term downward trajectory and head towards post-Brexit swing lows support near 129.00-128.80 region.