GBP/JPY retreats from weekly highs, back below 140.00
|- Lower US yields and a decline in Wall Street favors the Yen.
- Pound shows resilience but fails to offset Yen’s strength.
The GBP/JPY pair failed to hold on top of 140.00, on the back of a rally of the Japanese Yen across the board. Risk aversion boosted the demand for safe-haven assets, favoring Gold, CHF and JPY.
Pound steady, Yen higher
The Pound keeps the positive tone as the United Kingdom heads for elections in December. With no new Brexit headlines, the UK politics is likely to dominate the scenario. Despite the positive tone around the Sterling, GBP/JPY is falling on Thursday retreating from weekly highs.
Earlier today, the cross reached at 140.67, the highest level in a week but it then turned to the downside, breaking 140.30 and then 140.00. It bottomed at 139.76 and as of writing trades at 139.85, down almost 50 pips for the day, and ending a three-day positive streak.
The slide took place amid a rally of the Japanese Yen. Equity prices are falling in Wall Street with the Dow Jones losing 0.65% and the NASDAQ 0.20%. Concerns about the possibility of a trade deal between the US and China weighed on market sentiment. Risk aversion also boosted the demand for US bonds. The 10-year yield tumbled to 1.69%, the lowest since October 15; yesterday it stood above 1.80%.
Technical outlook
The GBP/JPY remains on a wide consolidation range. In the short-term the bias now favors the downside. A slide below 139.50/55 would expose the 139.00 handle that capped the downside last week. On the upside, a recovery back above 140.30 would remove the bearish bias while a daily close on top of 141.00 should clear the way for another leg higher.
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