• Improving risk sentiment undermines JPY’s safe-haven demand and extended some support.
• The short-covering bounce seemed rather unaffected by Tuesday’s mixed UK jobs data.
The GBP/JPY pair held on its positive tone through the mid-European session, albeit bulls seemed struggling to extend the momentum further beyond the 142.00 handle.
A slight improvement in the global risk sentiment dampened the Japanese Yen's relative safe-haven status and turned out to be one of the key factors prompting some short-covering bounce, especially after the recent slump of around 530-pips over the past two weeks or so.
Meanwhile, bulls seemed rather unimpressed by today's mixed UK employment details, with the lack of progress in the cross-party Brexit talks weighing on the British Pound and collaborating towards capping any meaningful up-move, at least for now.
In the latest Brexit development, reports suggested that the UK PM Theresa May will not sign for a permanent customs union - a key demand by the opposition Labour party in the long cross-party talks, and further dented hopes of a cross-party agreement/raised chances of a no-deal Brexit.
The news, so far, had a rather limited impact on the British Pound, with fading safe-haven demand turning out to be an exclusive driver of the pair's steady recovery from the lowest level since mid-Feb. However, it would be prudent to wait for a strong follow-through before confirming that the cross might have already bottomed out and positioning for any further near-term appreciating move.
Technical levels to watch
Any subsequent recovery is likely to confront some fresh supply near the 142.50-70 area, above which the cross is likely to surpass the 143.00 handle and aim towards testing its next major resistance near the 143.70-80 region. On the flip side, the 141.55-50 region now seems to protect the immediate downside, which if broken might pave the way for an extension of the near-term bearish trajectory towards testing the 141.00 round figure mark.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.