GBP/JPY steadies below 138, erases more than 200 pips on Wednesday

Risk-aversion dominates first half of the day.
Brexit uncertainty continues to weigh on the GBP.

Eren Sengezer FXStreet

The GBP/JPY started 2019 on the back foot as investors turned their attention to uncertainties surrounding the upcoming Brexit vote and negotiations with the EU as well as stayed focused on concerns over a global economic slowdown led by China. The risk-off mood boosted the demand for the safe-haven JPY and caused the pair to fall to its lowest level since April of 2017 at 137.43. With markets calming down in the second half of the day, the pair started consolidating its daily losses and was last seen down 235 pips on the day at 137.55, posting a daily drop of around 1.7%.

Confirming the dismal risk sentiment, major European indices suffered losses as well. Similarly, major equity indexes in the U.S. started the day in the negative territory and now look to finish the day mixed after failing to cling to recovery gains in the late trading hours.

In the meantime, today's data from the UK revealed that the manufacturing sector expanded at a faster pace than expected in December but couldn't provide support to the pound. On Thursday, the IHS Markit will be releasing the PMI data for the construction sector. On the other hand, Nikkei Manufacturing PMI will be the only data release from Japan on Friday.

Technical levels to watch for

GBP/JPY

Overview:
    Today Last Price: 137.74
    Today Daily change: -2.2e+2 pips
    Today Daily change %: -1.60%
    Today Daily Open: 139.98
Trends:
    Previous Daily SMA20: 141.72
    Previous Daily SMA50: 144.04
    Previous Daily SMA100: 144.93
    Previous Daily SMA200: 146.28
Levels:
    Previous Daily High: 140.11
    Previous Daily Low: 138.06
    Previous Weekly High: 141.04
    Previous Weekly Low: 138.86
    Previous Monthly High: 145.52
    Previous Monthly Low: 138.86
    Previous Daily Fibonacci 38.2%: 139.33
    Previous Daily Fibonacci 61.8%: 138.84
    Previous Daily Pivot Point S1: 138.66
    Previous Daily Pivot Point S2: 137.33
    Previous Daily Pivot Point S3: 136.61
    Previous Daily Pivot Point R1: 140.71
    Previous Daily Pivot Point R2: 141.43
    Previous Daily Pivot Point R3: 142.76

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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