GBP/JPY surges to 2-week highs beyond mid-146.00s

An offered tone around the Japanese Yen helped the GBP/JPY cross to build on its momentum beyond the 146.00 handle and jump to the highest level in over 2-week.

Currently holding comfortably above mid-146.00s, the cross continued gaining traction through early European trading session despite weaker UK data that showed construction activity deteriorated sharply in July. In fact, the UK construction PMI dropped to an 11-month low level of 51.9, down from June's 54.8 and worse than 54.5 expected. 

Meanwhile, a fresh wave of US Dollar selling pressure lifted the GBP/USD major to fresh yearly tops and the spill0ver effect further collaborated to the strong bid tone surrounding the cross. Even a mildly cautious sentiment around European equity markets did little to boost the Japanese Yen's safe-haven demand and stall the pair's strong up-move.

With investors shrugging off softer UK economic data, a follow through bullish momentum, even beyond the 147.00 handle, now seems a distinct possibility ahead of the very important BOE monetary policy announcement on Thursday.

Technical levels to watch

Sustained move beyond 146.80 level should lift the cross even beyond the 147.00 handle towards testing its next major hurdle near 147.40-50 region. On the flip side, any retracement below mid-146.00s now seems to find some fresh buying interest near the 146.00 handle, below which the cross could drop back to 145.75 strong horizontal support.