GBP/JPY drops to 151.00 neighbourhood, over two-month lows


  • GBP/JPY witnessed heavy selling on Thursday amid the prevalent risk-off mood.
  • COVID-19 jitters weighed on investors’ sentiment and boosted the safe-haven JPY.
  • A softer tone surrounding the GBP further contributed to the intraday selling bias.

A strong pickup in demand for the safe-haven JPY dragged the GBP/JPY cross to over two-month lows, around the 151.15 region during the first half of the European session.

Worries about the economic fallout from the spread of the highly contagious Delta variant of COVID-19 took its toll on the global risk sentiment. This was evident from a steep decline in the equity markets, which boosted demand for traditional safe-haven currencies, including the Japanese yen and exerted heavy pressure on the GBP/JPY cross.

Apart from this, a softer tone surrounding the British pound further contributed to the GBP/JPY pair's sharp intraday decline to the lowest level since May 4. That said, the optimism over the imminent reopening of the UK economy acted as a tailwind for the sterling and helped limit any deeper losses for the cross, at least for the time being.

It is worth recalling that the UK Prime Minister Boris Johnson set out plans for the final step of easing lockdown and announced that all restrictive measures would be lifted on July 19. Johnson also confirmed that people will no longer be instructed to work from home and that there will be no limits on how many people, or where they can meet socially.

In the absence of any major market-moving economic releases from the UK, the JPY price dynamics would continue to be an exclusive driver of the pair's momentum. From a technical perspective, sustained weakness below the 151.00 mark will be seen as a fresh trigger for bearish traders and turn the GBP/JPY cross vulnerable to extend its downward trajectory.

Technical levels to watch

GBP/JPY

Overview
Today last price 151.44
Today Daily Change -1.35
Today Daily Change % -0.88
Today daily open 152.79
 
Trends
Daily SMA20 153.89
Daily SMA50 153.92
Daily SMA100 152.19
Daily SMA200 145.93
 
Levels
Previous Daily High 153.17
Previous Daily Low 152.29
Previous Weekly High 154.23
Previous Weekly Low 152.62
Previous Monthly High 155.94
Previous Monthly Low 151.32
Daily Fibonacci 38.2% 152.84
Daily Fibonacci 61.8% 152.63
Daily Pivot Point S1 152.33
Daily Pivot Point S2 151.87
Daily Pivot Point S3 151.46
Daily Pivot Point R1 153.21
Daily Pivot Point R2 153.63
Daily Pivot Point R3 154.09

 

 

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