GBP/JPY retreats from 2-week tops, slides to 139.70-65 region
- GBP/JPY failed to capitalize on the previous day’s strong intraday positive move.
- Reviving safe-haven demand benefitted the JPY and exerted pressure on the cross.
- Any subsequent fall might still be seen as a buying opportunity and remain limited.
The GBP/JPY cross maintained its offered tone through the mid-European session and was last seen trading near the lower end of its daily trading range, around the 139.65 region.
The cross continued with its struggle to find acceptance/build on the momentum beyond the key 140.00 psychological mark and witnessed an intraday turnaround on Wednesday. The pullback was exclusively sponsored by reviving demand for the safe-haven Japanese yen amid a softer tone surrounding the equity markets.
Concerns about the US economic recovery resurfaced following the disappointing release of the Conference Board's Consumer Confidence Index on Tuesday. The market worries partly offset the optimism over a potential vaccine/treatment for the coronavirus disease and took its toll on the global risk sentiment.
On the other hand, the British pound was seen consolidating the overnight strong gains and did little to influence the GBP/JPY cross. The GBP bulls seemed rather unaffected by the lack of progress in Brexit talks and even shrugged off weaker UK CBI distributive trade survey, showing that sales fell 6% in August.
The GBP/JPY cross has now eroded a part of the previous day's positive move, though any subsequent slide might attract some dip-buying near the 139.00 horizontal support. Failure to defend the mentioned level might prompt some technical selling and turn the cross vulnerable to slide back to the 138.25 region.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
