GBP/JPY flirts with two-week lows, risks breaking below 154.00 mark

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.

Haresh Menghani FXStreet

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

GBP/JPY

Overview
Today last price	154.31
Today Daily Change	-0.50
Today Daily Change %	-0.32
Today daily open	154.81

Trends
Daily SMA20	154.74
Daily SMA50	152.73
Daily SMA100	150.22
Daily SMA200	144.17

Levels
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

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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