- GBP/JPY witnessed some follow-through selling for the second straight session on Friday.
- Dovish BoE, COVID-19 jitters weighed on the British pound and exerted some pressure.
- The risk-on mood undermined the safe-haven JPY and might help limit any further losses.
The GBP/JPY cross extended the previous day's rejection slide from the vicinity of the 154.00 mark and edged lower for the second consecutive session on Friday. The cross was last seen hovering near the lower end of its intraday trading range, around the 153.30-25 region.
The British pound was weighed down by the overnight dovish comments by the BoE Governor, Andrew Bailey, saying that the central bank should not overreact to temporarily strong inflation. This, along with worries about the spread of the more contagious Delta variant of the coronavirus, acted as a headwind for the sterling.
On the other hand, the underlying bullish tone in the financial markets continued undermining the safe-haven Japanese yen, which was further pressured by sustained US dollar buying. This, in turn, might hold traders from placing any aggressive bets and help limit any further losses for the GBP/JPY cross, at least for now.
With the latest leg down, the GBP/JPY cross has now erased a major part of its recovery gains recorded on Wednesday and remains on track to slide further. In the absence of any major market-moving economic releases, the US NFP-led volatility in the markets might influence the cross and produce some short-term trading opportunities.
Technical levels to watch
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