- GBP/JPY comes under some fresh selling pressure on Thursday.
- Reviving safe-haven demand for the JPY weighed on the cross.
The GBP/JPY cross edged lower through the early European session on Thursday and eroded a part of the previous session's positive move to over one-month tops.
A combination of factors failed to assist the cross to build on the overnight strong gains, triggered by improvement in the gauge of optimism in the manufacturing sector, rather prompted some selling on Thursday.
It is worth recalling that the CBI's Quarterly Business Situation Index jumped sharply to +23 in January from -44 in October and marked the stronger level since April 2014 – also the largest quarterly swing since 1958.
The data added to the latest optimism led by Tuesday's stronger-than-expected UK wage growth figures and forced investors to temper expectations for an imminent interest rate cut by the Bank of England.
As investors assess the possibility of a BoE rate cut at its upcoming meeting on January 30, British pound consolidated the previous session's strong intraday gains and held traders from placing fresh bullish bets.
On the other hand, Concerns of the coronavirus outbreak in China continued benefitting the Japanese yen's perceived safe-haven status and turned out to be one of the key factors exerting some pressure on the cross.
The cross has now weakened back below the 144.00 round-figure mark, retreating around 90 pips from the overnight swing high, and was being exclusively driven by reviving safe-haven demand.
It will now be interesting to see if the cross is able to attract any dip-buying interest at lower levels or continues with the ongoing corrective slide amid absent relevant market-moving economic data from the UK.
Technical levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0800 on USD weakness
EUR/USD trades in positive territory above 1.0750 in the second half of the day on Monday. The US Dollar struggles to find demand as investors reassess the Fed's rate outlook following Friday's disappointing labor market data.
GBP/USD closes in on 1.2600 as risk mood improves
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold gathers bullish momentum, climbs above $2,320
Gold trades decisively higher on the day above $2,320 in the American session. Retreating US Treasury bond yields after weaker-than-expected US employment data and escalating geopolitical tensions help XAU/USD stretch higher.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Three fundamentals for the week: Two central bank decisions and one sensitive US Premium
The Reserve Bank of Australia is set to strike a more hawkish tone, reversing its dovish shift. Policymakers at the Bank of England may open the door to a rate cut in June.