GBP/JPY edges lower to 154.00 area, Russia-Ukraine risk continues to weigh on sentiment
|- GBP/JPY turned lower for the third successive day amid reviving demand for the safe-haven JPY.
- Escalating Russia-Ukraine conflict kept investors on the edge and benefitted safe-haven assets.
- Modest USD strength weighed on the GBP, which further contributed to the intraday selling bias.
The GBP/JPY cross witnessed some selling during the first half of the European session and dropped to a fresh daily low, around the 154.15 region in the last hour.
The cross gained some positive traction during the early part of the trading on Friday, albeit struggled to capitalize on the move and met with a fresh supply near the 154.80 region. The worsening situation in Ukraine continued weighing on investors' sentiment, which, in turn, benefitted the safe-haven Japanese yen and acted as a headwind for the GBP/JPY cross.
In the latest developments, reports indicated that Russian forces have entered the Obolon district in Kyiv. According to the Kyiv Independent, the Ukrainian military is fighting off the Russian troops and there are also mentions of Russian air missiles spotted in north of Kyiv. Adding to this, calls to disconnect Russia from the SWIFT kept investors on the edge.
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Meanwhile, reviving safe-haven demand underpinned the US dollar and attracted fresh selling around the British pound. This was seen as another factor that dragged the GBP/JPY cross into the negative territory for the third successive day. A subsequent slide below the 154.00 round figure will set the stage for a slide towards challenging the 200-day SMA support.
Nevertheless, the GBP/JPY cross seems all set to post heavy weekly losses and remains at the mercy of the incoming geopolitical headlines. Hence, the focus will be on the outcome of the NATO summit, which might influence the broader market risk sentiment. This, in turn, would drive demand for the safe-haven JPY and provide some meaningful impetus to the GBP/JPY cross.
Technical levels to watch
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