- GBP / JPY remained under strong selling pressure for the second day in a row.
- Reviving demand for the safe-haven JPY, a pullback in the GBP contributed to the decline.
- The weakness below the 149.80 region will set the stage for an extension of the slide.
The crossing GBP/JPY It fell to the lower end of its weekly trading range, with bears now eyeing a sustained break below the key psychological 150.00 level.
The cross extended the previous day’s retracement slide from near 152.00, or near two-week lows and witnessed some selling for the second consecutive session on Wednesday. The revival of demand for the Japanese yen as a safe haven, coupled with a pullback in the British pound, contributed to the decline.
Renewed fears about another dangerous wave of coronavirus infections in some countries affected global risk sentiment. This was evident by a weaker tone around equity markets, which forced investors to take refuge in traditional safe-haven currencies and continued to benefit the yen.
On the other hand, the British pound came under pressure from softer UK consumer inflation figures released earlier this Wednesday. In fact, the UK headline CPI rose 1.5% in March and the annual rate stood at 0.7%, both disappointing consensus estimates. Apart from this, a modest strength in the US dollar put even more pressure on the pound.
With the last leg down, the GBP / JPY now appears to have stalled its recent bounce from multi-week highs. A subsequent decline below the 149.80 region will lay the groundwork for the resumption of the corrective pullback from the three-year highs, around the 153.40 region touched in early April.