GBP/JPY rebounds from the post-BoE swing low, finds some support ahead of 141.00 handle

   “¢   BoE cuts to its economic growth forecasts for 2019/20 and prompts some aggressive selling.
   “¢   Global risk-aversion trade underpins JPY’s safe-haven demand and aggravates the downfall.
   “¢   Investors now seemed to wait for fresh Brexit development from May/Juncker meeting.

The GBP/JPY cross quickly recovered around 40-pips from the post-BoE swing lows to over two-week lows, albeit lacked any strong follow-through.

The already weaker British Pound was further knocked down after the latest dovish message by the Bank of England’s (BoE) quarterly inflation report, wherein the central bank lowered its growth forecasts for this year and next in the wake of intensifying Brexit uncertainties.

This coupled with a fresh wave of global risk-aversion trade, as depicted by a sea of red across equity markets, boosted the Japanese Yen’s relative safe-haven status and further collaborated to the pair’s sharp intraday slide to a session low level of 141.13.  

The downside, however, remained limited as investors still seemed reluctant to place any aggressive bets and preferred to wait for fresh Brexit developments, especially on the backstop issue, from the UK PM Theresa May’s meeting with the European Commission President Jean-Claude Juncker.

Technical levels to watch