- GBP/JPY remained under some heavy selling pressure for the second straight day.
- Reviving demand for the safe-haven JPY, a pullback in the GBP contributed to the slide.
- Weakness below the 149.80 region will set the stage for an extension of the downfall.
The GBP/JPY cross dropped to the lower end of its weekly trading range, with bears now eyeing a sustained break below the key 150.00 psychological mark.
The cross extended the previous day's retracement slide from the vicinity of the 152.00 mark, or near two-week lows and witnessed some selling for the second consecutive session on Wednesday. Reviving demand for the safe-haven Japanese yen, along with a pullback in the British pound contributed to the downfall.
Renewed fears about another dangerous wave of coronavirus infections in some countries took its toll on the global risk sentiment. This was evident from a weaker tone surrounding the equity markets, which forced investors to take refuge in traditional safe-haven currencies and continued benefitting the JPY.
On the other hand, the sterling was pressured by softer UK consumer inflation figures released earlier this Wednesday. In fact, the headline UK CPI rose 1.5% in March and the yearly rate came in at 0.7%, both missing consensus estimates. Apart from this, a modest US dollar strength further exerted some pressure on the pound.
With the latest leg down, the GBP/JPY cross now seems to have stalled its recent bounce from multi-week tops. A subsequent slide below the 149.80 region will set the stage for the resumption of the corrective pullback from three-year tops, around the 153.40 region touched earlier this April
Technical levels to watch
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