GBP/JPY spikes to fresh session tops and retreats

   •  Carney's hawkish comments provide a minor lift to the British Pound.
   •  UK political and Brexit uncertainties keep a lid on any runaway rally.
   •  Reviving safe-haven demand underpins the JPY and further cap gains.

The GBP/JPY cross managed to reverse an early dip to the 137.00 handle and spiked to fresh session tops in the last hour, albeit quickly retreated few pips thereafter. 

The British Pound picked up the pace in the last hour in wake of the BoE Governor Mark Carney's hawkish comments on the need to raise interest rates further in order to keep inflation at target.

In the BoE's annual report, Carney said that if the economy continues to perform as expected, upward pressure on prices is likely to build but reiterated that any rises will happen to a limited extent and at a gradual pace.

The cross spiked to an intraday high level of 137.63 in reaction to the latest headlines, though persistent UK political and Brexit uncertainties kept a lid on any strong follow-through positive momentum.

This coupled with reviving safe-haven demand, amid a flurry of negative trade-related headlines, underpinned the Japanese Yen and further collaborated towards capping the pair's intraday up-move.

Hence, it would be prudent to wait for a sustained buying interest before confirming that the cross might have actually bottomed out in the near-term and positioning for any further appreciating move.

Technical levels to watch