- GBP/JPY added to the overnight losses and witnessed heavy selling for the second straight day.
- Brexit jitters, COVID-19 woes acted as a headwind for the sterling and exerted some pressure.
- Sustained weakness below mid-154.00s might have already set the stage for additional losses.
The offered tone surrounding the British pound dragged the GBP/JPY cross to two-week lows, around the 154.15-10 region during the first half of the European session.
The cross extended the previous day's sharp pullback from the 155.30 region, or weekly tops and witnessed some follow-through selling for the second consecutive session on Thursday. The downfall was sponsored by the emergence of some heavy selling around the sterling and pushed the GBP/JPY cross further away from multi-year tops, around the 156.00 mark touched in May.
The EU-UK collision over Norther Ireland protocol, along with coronavirus jitters acted as a headwind for the GBP. The European Union warned of swift and firm action if the UK fails to implement its post-Brexit obligations. There are also speculations that the UK may delay plans to end restrictions fully on June 21 in light of the spread of the so-called Delta variant.
The combination of factors overshadowed the overnight comments by the Bank of England Chief Economist, Andy Haldane, saying that the central bank might need to turn off the tap of its huge monetary stimulus. Adding to this, the prevalent cautious mood benefitted the safe-haven Japanese yen and further contributed to the ongoing decline to the lowest level since May 27.
With the latest led down, the GBP/JPY cross now seems to have confirmed a bearish break below horizontal support near mid-154.00. A subsequent fall below the 154.00 round figure will reaffirm the negative bias in the absence of any major market-moving economic releases. This, in turn, will set the stage for an extension of the near-term depreciating move.
Technical levels to watch
|Today last price||154.31|
|Today Daily Change||-0.50|
|Today Daily Change %||-0.32|
|Today daily open||154.81|
|Previous Daily High||155.32|
|Previous Daily Low||154.48|
|Previous Weekly High||155.94|
|Previous Weekly Low||154.82|
|Previous Monthly High||156.08|
|Previous Monthly Low||150.93|
|Daily Fibonacci 38.2%||154.8|
|Daily Fibonacci 61.8%||155|
|Daily Pivot Point S1||154.42|
|Daily Pivot Point S2||154.04|
|Daily Pivot Point S3||153.59|
|Daily Pivot Point R1||155.26|
|Daily Pivot Point R2||155.71|
|Daily Pivot Point R3||156.09|
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.