- Reviving safe-haven demand benefitted the JPY and exerted some pressure.
- The downside remains limited on the back of the incoming UK election polls.
The GBP/JPY cross failed to capitalize on the previous session’s positive move and remained on the defensive through the mid-European session on Wednesday.
With investors looking past Tuesday’s upbeat UK services PMI print for October, the British Pound struggled to gain any follow-through traction amid uncertainty about the outcome of UK snap election in December.
Traders remain on the sideline
Meanwhile, the prevalent cautious mood around equity markets underpinned demand for traditional safe-haven currencies – including the Japanese Yen – and was seen as one of the key factors weighing on the cross.
However, the fact that the incoming opinion polls have been indicating a majority for the UK Prime Minister Boris Johnson’s Conservative Party at the upcoming election in December helped limit the downside.
From a technical perspective, the cross has been oscillating in a narrow trading band over the past two weeks or so. Hence, it will be prudent to wait for a sustained break through the mentioned range before placing any fresh directional bets.
Technical levels to watch
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