GBP/JPY flirting with multi-month lows, around 139.00 handle amid the ongoing UK political drama

   •  UK political drama continues to dent the already weaker sentiment surrounding the GBP.
   •  Risk-off mood underpins JPY's safe-haven demand and adds to the bearish pressure.

The GBP/JPY cross maintained its offered tone on Thursday and dropped to fresh four-month lows in the last hour, albeit managed to recover few pips thereafter.

The British Pound remained depressed and the cross added to its recent heavy losses amid the recent Brexit-related UK political chaos, wherein various reports suggest an imminent exit of the PM Theresa May within the next day or two.

Against the backdrop of increasing chances of a change in the leadership, speculations that a pro-Brexit hardliner might lead the UK into a no-deal split further dented the already weaker sentiment and collaborated to the recent bearish pressure. 

The cross momentarily slipped below the 139.00 handle – for the first time since mid-January and was further pressurized by escalating US-China trade tensions-led global risk-aversion trade, which tends to underpin the Japanese Yen’s safe-haven demand.

However, slightly oversold conditions helped limit deeper losses, at least for the time being, with the cross now showing some resilience at lower levels as investors await fresh updates on the ongoing UK p political drama.

Technical levels to watch