GBP/JPY: Mildly bid around mid 150.00s amid risk-on mood

• GBP/JPY bulls take a breather after the quote rose the most in a month.
• Covid woes, Brexit jitters and downbeat PMIs battle vaccine optimism.
• UK calls for emergency G7 video-conferencing to tackle the Taliban issue.
• Light calendar keeps risk catalysts on the driver’s seat.

GBP/JPY edges higher around 150.50 during Tuesday’s Asian session. The cross-currency pair rose the most since late July the previous day amid improving market sentiment.

Vaccine news joined hopes of further easy money policies to back the risk-on mood on Monday. However, a lack of major catalysts and geopolitical fears seem to challenge the bulls of late.

Not only the US Food & Drug Administration’s (FDA) approval to Moderna–BioNTech vaccine but the UK’s readiness to order 35.00 million doses of Pfizer vaccine for booster shot also portrays the vaccine optimism. With the Delta covid variant spreading faster, an increased pace of jabbing becomes necessary to reject another round of pandemic-led long lockdowns.

Elsewhere, preliminary activity numbers of August also portrayed the need for sustained easy money policies as the latest figures from Japan and the UK eased from the previous readouts while staying into the growth territory, meaning above 50.00. With this, the Bank of England (BOE) and the Bank of Japan (BOJ) may have another reason to reject the tapering chatters.

It’s worth noting that Sky News recently came out with the letter from No10 calling for an emergency video-conference meeting of the Group of Seven (G7) members over the Taliban issue. The letter signals the UK’s dislike for the Taliban’s recapturing of power in Afghanistan and is likely pushing the US to act.

Also on the negative side could be the Brexit jitters suggesting 80,000 EU nationals may be forced to leave the UK as the deadline for applying the British status expired.

Amid these plays, the S&P 500 Futures rise 0.17% after the Wall Street benchmarks impressed investors with an upbeat start to the week.

Looking forward, a light calendar will keep GBP/JPY traders directed towards qualitative factors, like coronavirus, Taliban, Brexit and central banks, for fresh impulse.

Technical analysis

Although a one-month-old ascending support line near 149.20, followed by the 200-DMA level near 148.50, restricts the GBP/JPY pair’s short-term downside, bulls remain baffled below the early August bottom near 151.20.