Once again sterling fails to drive home an advantage against the dollar in the high 1.31s, but GBP traders might also consider GBP/JPY as a bear trade.
The 140.00 level has kept just out of reach and recent tight daily sessions hint at market indecision and fading bullish impetus.
The dollar is fighting back as COVID-19 continues to hold risk to ransom, and despite some positive data, the global economic position still argues for caution.
Under these conditions the yen should do well and unless USD/JPY breaks above 106.50 the risk remains skewed to the downside.
GBP/JPY is supported by the 10-day moving average at 137.83 and the 200-day moving average at 137.47.
A drop under 137.40 could open up the July 22 top at 136.62 and then the 134.93 low from July 24.
Weekly price action is clinging to a fragile bull bias and the weekly cloud base at 137.68 will be key this week.
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