GBP/JPY recovers early lost ground after upbeat UK manufacturing PMI

The GBP/JPY cross recovered all of its early losses to session low near the 145.40 region and has now moved within striking distance of daily peaks following the release of UK manufacturing PMI.

The cross caught some fresh bids and spiked around 20-pips after the latest UK manufacturing PMI print surpassed even the most optimistic estimates, coming in at 55.1 for July as compared to a no change at 54.3 expected. 

Today's strong manufacturing sector performance might have lifted expectations from other sectors of the economy and eventually provided a minor boost to the British Pound. Hence, Wednesday's construction PMI, followed by services PMI on Thursday would remain in focus ahead of the very important BOE monetary policy announcement.

The up-move, however, lacked strong follow through momentum amid persistent safe-haven demand, which continues to lend support to the Japanese Yen and was seen keeping a lid on the cross. 

Technical levels to watch

On a sustained weakness below mid-145.00s, the cross could head back to the key 145.00 psychological mark before dropping to its next support near 144.70-65 horizontal zone. On the upside, the 146.00 handle remains an immediate strong hurdle, which if cleared has the potential to lift the cross towards 146.30-35 intermediate resistance en-route 146.75 level.