GBP/JPY spikes to 143.00 handle post UK jobs data

The GBP/JPY cross held with modest gains for the fourth consecutive session and spiked back to the 143.00 handle following the release of UK jobs data. 

The spot caught fresh bids after data released from the UK showed the number of people claiming unemployment-related benefits unexpectedly dropped by 4.2K during the month of July. This coupled with a downward revision of previous month’s reading to 3.5K, from 6.0K reported early, and a surprise drop in the unemployment rate to 4.4% provided some immediate respite for the GBP bulls. 

The British Pound got an additional boost from better-than-expected average earnings growth, with wages including/excluding bonus recording a growth of 2.1% during the reported period. 

   •  UK jobs solid: A positive surprise across all indicators

Meanwhile, easing geopolitical tensions between the US and N. Korea continued driving investors back towards riskier assets - like equities, which was seen weighing on the Japanese Yen's safe-haven appeal and further collaborated to the strong bid tone surrounding the cross.

With the UK economic data out of the way, FOMC minutes-led volatility in the FX markets would now be a key determinant of the pair’s movement during NY trading session on Wednesday. 

Technical levels to watch

On a sustained weakness back below the 142.00 handle (200-day SMA), the cross is likely to accelerate the slide towards 141.65 horizontal support before eventually dropping to test the 141.00 round figure mark. On the upside, bulls would be eyeing for a sustained break through the 143.00 handle, above which the cross is likely to aim towards reclaiming the 144.00 mark with some intermediate resistance near the 143.35-40 region.