GBP/JPY jumps to 151.00 neighbourhood, lacks follow-through

• GBP/JPY gained strong positive traction for the second successive session on Monday.
• A modest USD weakness benefitted the GBP and remained supportive of the move up.
• The risk-off impulse, fuel crisis in the UK warrants caution for aggressive bullish traders.

The GBP/JPY cross caught some fresh bids during the early European session and shot to two-day tops, around the 150.85 region in the last hour.

The cross built on the previous session's goodish rebound from the 149.25-20 region and gained some follow-through traction on the first day of a new trading week. The British pound benefitted from a modest US dollar weakness. Apart from this, an offered tone surrounding the Japanese yen pushed the GBP/JPY cross higher for the second successive day.

That said, a combination of factors might hold traders from placing aggressive bullish bets and keep a lid on any further gains for the GBP/JPY cross. Worries that Evergrande Group's debt crisis could spread to the entire Chinese property sector tempered investors' appetite for perceived riskier assets and could benefit the safe-haven Japanese yen.

On the other hand, the ongoing fuel crisis in the United Kingdom, along with renewed tensions between Britain and France over post-Brexit fishing rights could act as a headwind for the sterling. This, in turn, makes it prudent to wait for a strong follow-through buying before confirming that the GBP/JPY cross has bottomed out and positioning for any further gains.

There isn't any major market-moving economic data due for release from the UK on Monday, leaving the GBP/JPY cross at the mercy of the broader market risk sentiment. Apart from this, the USD price dynamics could influence the sterling and further contribute to producing some short-term trading opportunities around the cross.

Technical levels to watch