GBP/JPY clings to recovery gains above 131.00 after UK employment details

The GBP/JPY cross held on to its recovery gains above 131.00 handle and has now moved to mid-131.00s following the release of UK employment details.

According to the UK jobs report releases just a short while ago, the number of people claiming unemployment-related benefits during the month of July dropped by 8.6k as against expected rise by 5.2k and the unemployment rate held steady at 4.9%. Meanwhile, average earnings for quarter ending June rose 2.4% y-o-y, which was in-line with consensus estimates.

The data pointed to steady labor market conditions in the post-Brexit regime but failed to attract fresh buying interest and assist the cross to build on to its recovery gains from yesterday's multi-week lows near 129.00 region. 

Technical levels to watch

On a sustained move above 131.50 immediate resistance, the cross seems more likely to build on to its recovery gains beyond 132.00 round figure mark, towards testing resistance near 132.50 area. A follow through buying interest has the potential to continue boosting the pair towards its next major resistance near 133.50-60 region.

On the flip side, decisive break back below 131.00 handle would reaffirm descending trend-channel resistance and attract fresh selling pressure, which could drag the pair back towards 130.00 psychological mark. A convincing break below 130.00 handle now seems to trigger a fresh leg of downslide initially towards Tuesday's low support near 129.00 region and eventually towards testing the descending trend-channel support near 127.00 area in the near-term.