GBP/JPY climbs back closer to multi-month tops set on Thursday, just below 140.00 mark

• GBP/JPY rebounds over 50 pips from daily swing lows and moves back closer to daily tops.
• The latest optimism over Brexit talks underpinned the sterling and remained supportive.
• The anti-risk flow benefitted the safe-haven JPY and kept a lid on any meaningful upside.

The GBP/JPY cross quickly reversed an intraday dip to the 139.35 region and has now moved back closer to the top end of its daily trading range.

The British pound remained well supported by improving sentiment on Brexit trade talks, which, in turn, was seen as one of the key factors behind the GBP/JPY pair's goodish intraday bounce of over 50 pips.

Britain's chief negotiator David Frost said on Thursday that a Brexit agreement can be reached in September. This comes ahead of the next round of talks about the future relationship, set to commence in Brussels on August 18, and suggested that the two sides remain committed to reaching a deal.

However, a turnaround in the global risk sentiment, as depicted by a sharp fall in the equity markets, underpinned the Japanese yen's safe-haven demand and kept a lid on any further gains for the GBP/JPY cross.

Even from a technical perspective, the cross has been struggling to move beyond an upward sloping channel. This makes it prudent to wait for a sustained move beyond the 140.00 psychological mark before positioning for any further near-term appreciating move.

Meanwhile, the fact that the cross has managed to find acceptance above 100-week SMA supports prospects for additional gains. Nevertheless, the cross remains on track to end the week on a high note and register gains for the third week in the previous four.

Technical levels to watch