- GBP/JPY witnessed a modest pullback from two-week tops, snapping four days of winning streak.
- Brexit anxieties prompted some long-unwinding around the GBP and exerted downward pressure.
- Reviving safe-haven demand benefitted the Japanese yen and added to the intraday selling bias.
The GBP/JPY cross was seen hovering near the lower end of its daily trading range, with bearish traders now eyeing a sustained break below the 139.00 mark.
The cross struggled to capitalize on its recent positive move to two-week tops and started retreating from the vicinity of the 140.00 psychological mark. The GBP/JPY cross continued losing ground through the mid-European session on Thursday and for now, seems to have snapped four consecutive days of winning streak.
Brexit anxieties prompted some long-unwinding around the British pound, which, along with reviving demand for the safe-haven Japanese yen, exerted some downward pressure on the GBP/JPY cross. Comments by the British finance minister, Rishi Sunak, saying that he remains hopeful that a deal can be reached, failed to impress bulls.
It is worth reporting that negotiators are yet to find a compromise on key sticking points – the so-called level playing field, fisheries and state-aid rules. With very little time left before the Brexit transition periods end on December 31, the deadlock seemed to have tempered the recent optimism for a last-minute Brexit deal.
Concerns about a no-deal Brexit resurfaced after the UK Prime Minister Boris Johnson reiterated that the UK's position on fisheries hasn't changed and that they will not ask for additional time to negotiate the trade deal with the European Union. Separately, the European Commission president, Ursula van der Leyden said that the disagreement over access to Britain's fishing waters continues to block progress.
On the other hand, the safe-haven Japanese yen benefitted from a softer tone surrounding the US equity markets. As markets digested the progress towards the development of a potential vaccine for the highly contagious coronavirus disease, investors opted to take some profits off the table following the recent strong bullish run up.
It will now be interesting to see if the GBP/JPY cross is able to find any support at lower levels or a sustained break below the 139.00 mark sets the stage for a further near-term depreciating move. That said, the incoming Brexit-related headlines will continue to play a key role in influencing the GBP and warrants some caution before placing aggressive directional bets.
Technical levels to watch
|Today last price||139.14|
|Today Daily Change||-0.69|
|Today Daily Change %||-0.49|
|Today daily open||139.83|
|Previous Daily High||139.84|
|Previous Daily Low||139|
|Previous Weekly High||138.87|
|Previous Weekly Low||137.2|
|Previous Monthly High||137.86|
|Previous Monthly Low||134.41|
|Daily Fibonacci 38.2%||139.52|
|Daily Fibonacci 61.8%||139.32|
|Daily Pivot Point S1||139.28|
|Daily Pivot Point S2||138.72|
|Daily Pivot Point S3||138.44|
|Daily Pivot Point R1||140.11|
|Daily Pivot Point R2||140.39|
|Daily Pivot Point R3||140.95|
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.