“¢ Brexit uncertainties continue to dent sentiment surrounding the British Pound.
“¢ JPY benefits from the prevalent risk-off mood and adds to the selling pressure.
The GBP/JPY cross remained heavily offered through the early European session on Thursday and tumbled to one-week lows in the last hour, albeit quickly recovered few pips thereafter.
The already weaker sentiment surrounding the British Pound deteriorated further after DUP leader – Arlene Foster ruled out the possibility of abstaining from voting on the UK PM Theresa May’s Brexit deal.
This coupled with the fact that DUP is not willing to support May’s Brexit deal, which makes it highly unlikely that the deal could get enough votes to pass through the Parliament and was seen as one of the key factors weighing on the Sterling.
Meanwhile, deteriorating global risk sentiment, triggered by worrying signals of an impending recession in the US, underpinned the JPY’s safe-haven demand and further collaborated to the pair’s intraday slide to mid-144.00s.
The bearish pressure, however, now seems to have eased a bit, at least for the time being, with the cross once again finding decent support near 50-day SMA and recovering around 50-pips from daily swing low.
Hence, it would be prudent to wait for a convincing break through the mentioned support, which if broken should pave the way for an extension of the recent retracement slide from over four-month tops set earlier this month.
Technical levels to watch
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