GBP/JPY in a tight range around 132.00

GBP/JPY is trading on a firm fashion on Tuesday following a renewed bid tone surrounding the British pound.

GBP/JPY extending its rangebound theme

The cross has managed to regain the 132.00 limestone today, although it keeps alive the broader consolidative pattern since mid-August, with support around 129.00 and gains so far limited to the 132.00 neighbourhood.

Extreme positioning in GBP – with speculative net shorts at record levels - could allow a squeeze higher in the near term, although the extent of such a move should be shallow.

In the meantime, the re-emergence of the selling bias around the dollar is giving extra legs to the demand for JPY, capping at the same time potential gains.

GBP/JPY key levels

As the moment the cross is gaining 0.17% at 132.02 and a break above 132.74 (20-day sma) would expose 136.19 (23.6% Fibo of post-Brexit down move) and finally 138.50 (55-day sma). On the other hand, the initial support lines up at 128.77 (2016 low Jul.6) followed by 118.70 (low Jun.1 2012) and then 117.30 (low Jan.13 2012).