GBP/JPY trims recovery gains, back below 133.00 handle

Following a sharp sell-off on Friday, strong bid tone surrounding the British Pound helped the GBP/JPY cross to recover some of its lost ground and built on to its recovery gains to mid-133.00s.
 
The cross, however, lost its upside momentum and trimmed its gains and is now trading back below 133.00 mark amid cautiousness heading into the much awaited BOJ monetary policy decision, scheduled on Wednesday.

Earlier on Monday, the pair’s recovery was driven higher solely on the back of a broad based recovery in the GBP/USD major amid renewed selling pressure around the greenback ahead of the key FOMC decision announcement, also on Wednesday. 

With an empty economic docket on Monday, the cross would continue to be driven by broader sentiment surrounding the British Pound amid uncertainty over further monetary easing by BOJ. 

From technical perspective, the cross has held 61.8% Fibonacci retracement level support of its up-move from August lows and hence, a follow through buying interest above mid-133.00s would open room for further recovery. 

Technical levels to watch

On a sustained move above 133.50, the cross is likely to immediately aim towards 50% Fibonacci retracement level resistance near 134.00 handle above which its seems all set to extend the recovery back towards an important confluence support break-point turned strong resistance near 135.00 psychological mark, comprising of 20-day and 50-day SMAs.

Meanwhile on the downside, decisive weakness below 61.8% Fibonacci retracement level support near 133.00-132.80 region is likely to pave way for further downslide towards 131.70 horizontal support with 132.20 level providing some intermediate support.