GBP/JPY’s recovery from 135.65 stalls near 137.00

• GBP?JPY bounces at 135.65 and consolidates at 137.00 area.
• The pound pares losses on hints of Brexit progress.
• Sterling crosses post a moderate recovery with all eyes on the EU summit.

The pound bounced up from a 12-day low at 135.62 on Wednesday and managed to regain lost ground after Tuesday’s sell-off before hitting resistance at 137.30 and retreat to 137.00 area during the US trading session.

The sterling picks up on hints of Brexit progress

The GBP appreciated against its main peers on Wednesday as reports of progress on the Brexit talks boosted investors’ optimism. Negotiators of Britain and the EU affirmed that they made “some progress” this week and suggested that they are set to postpone the deadline beyond mid-October. This has eased fears of a no-deal exit and offered some support to an ailing GBP.

UK prime minister Boris Johnson has “noted the desirability of a deal” after a call with the President of European Commission, Von der Leyden, although he expressed his disappointment for not having made more progress over the last two weeks.

The major GBP crosses have remained little moved during the last session despite the fairly positive Brexit news. Investors are awaiting the outcome of the EU summit later this week, that might set the direction for the GBP.

GBP/JPY technical levels to watch