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GBP / JPY reverses intraday decline to lows of more than a week, lateralized above 137.50

  • GBP / JPY witnessed some subsequent selling for the second day in a row on Thursday.
  • Traders refrained from making aggressive bets and preferred to wait for further Brexit updates.
  • A tone offered around the JPY safe haven further extended some support to the cross.

The crossing GBP/JPY It has managed to bounce around 50 pips from the lows of more than a week and was last seen trading in neutral territory, around the 137.70 region.

The crossing added to overnight losses and saw some subsequent selling during the first half of European trading action on Thursday. The bearish momentum confirmed a short-term bearish breakout through a four-day trading range and dragged the GBP / JPY cross to daily lows, around the 137.20 region.

The British pound came under pressure from reports that European leaders will demand that the European Commission publish no-deal plans. The fall, however, was not followed up in the absence of an official confirmation. This, coupled with a tone offered around the safe-haven Japanese yen, helped the GBP / JPY bounce away from lows.

Meanwhile, concerns about the economic fallout from escalating coronavirus cases continued to weigh on investor sentiment. This, in turn, extended some support to the JPY and limited the recovery attempt. Investors also preferred to wait for new Brexit updates before making aggressive directional bets.

An EU diplomatic source confirmed that the EU’s main Brexit negotiator Michel Barnier will go ahead with a briefing to update envoys from the bloc’s 27 member states on the latest in trade talks with the UK on Friday. . Meanwhile, the broader market risk sentiment will be considered for some short-term trading opportunities.

 

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