- GBP/JPY witnessed some aggressive selling and retreated over 100 pips from daily tops.
- Risks posed by the upcoming Scottish elections weighed heavily on the British pound.
- A generally softer risk tone benefitted the safe-haven JPY and added to the selling bias.
The GBP/JPY cross came under some intense selling pressure during the mid-European session and dived to fresh daily lows, around the 151.00 mark in the last hour.
The cross witnessed a dramatic intraday turnaround from the 152.00 round-figure mark and has now eroded a major part of the previous day's positive move. This marked the second day of a positive move in the previous three and dragged the GBP/JPY cross well within the striking distance of the lower end of a one-week-old trading range.
The risk posed by the upcoming Scottish elections overshadowed the optimism over the reopening of the UK economy and weighed on the British pound. Polls are pointing to a supermajority for pro-independence parties, which might intensify pressure on the UK PM Boris Johnson to allow a second independence referendum in Scotland.
Apart from this, a sharp pullback in the equity markets forced investors to take refuge in the traditional safe-haven Japanese yen. This was seen as another factor that exerted additional downward pressure on the GBP/JPY cross. The downside, however, remains limited as investors now seemed reluctant to place aggressive bets ahead of the BoE meeting on Thursday.
From a technical perspective, repeated failures to find acceptance above the 152.00 mark suggests that the recent bounce from the 149.00 mark might have run out of steam. Some follow-through weakness below the 151.00 mark will reaffirm the negative bias and set the stage for the resumption of the corrective pullback from three-year tops touched earlier this April.
Technical levels to watch
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 clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.