GBP/JPY recovers over 50-pips from 7-week lows, back above 140.00 mark

The GBP/JPY cross managed to recover around 70-pips from 7-week lows touched in the past hour and has now moved back above the key 140.00 psychological mark.

The outcome of the UK snap general election, with the ruling Conservative Party losing its parliamentary majority, weighed heavily on the sterling through early trading hours on Friday and dragged the cross to its lowest level since April 21.

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Meanwhile, the latest news headlines that Labour Party will put themselves forward to form a minority government now seems to have raised hopes for a softer Brexit and provided some immediate respite for the British Pound. 

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Adding to this, a fresh wave of global risk-on trade, reinforced by a stronger opening across European equity markets, drove investors away from traditional safe-haven assets, including the Japanese Yen, and further collaborated to the pair's strong recovery during early European session.

Next on tap would be the UK economic docket, featuring the release of manufacturing/industrial production and goods trade balance data, but is likely to be overshadowed by any further news/developments coming out of the UK.

Technical levels to watch

A follow through recovery above 140.40 level might prompt some additional short-covering move towards 140.75-80 resistance en-route 141.20 hurdle. On the downside, bears would be eyeing for a decisive break through multi-week lows support near mid-139.00s, below which the cross is likely to accelerate the slide towards the 139.00 handle before eventually heading towards its next major support near 138.30-20 region.