- GBP/JPY, rejected at 140.25, remains steady above 139.00.
- The pound lost steam as the coronavirus vaccine enthusiasm receded.
- The broad JPY weakness maintains the pound near two-month highs.
The sterling stretched higher on early trade on Wednesday in an attempt to extend its bullish reaction from 135.75 area to levels past 140.00. The pair managed to reach one-month highs 140.25 but failed to consolidate at those levels and retreated towards the lower range of 139.00.
GBP loses steam as risk appetite eases
The pound has been unable to maintain its positive tone for the third consecutive day and has lost momentum above 140.00 with the optimism about the COVID-19 vaccine cooling off as the markets look into the details of the whole process while infections continue surging in Europe and the US.
News about a vaccine has had a particularly strong impact on the GBP due to the economic damage caused by the pandemic in the UK and the high number of infections and casualties registered in the country.
Furthermore, downbeat news from the Brexit talks has contributed to hurt confidence on the pound. Investors hopes of an imminent agreement have vanished on Wednesday amid rumours that the mid-November target to clinch a deal is likely to be missed.
The GBP/JPY, however, remains fairly steady above 139.00 with the Japanese yen on the defensive amid a mildly positive sentiment. Hopes of a global economic recovery and higher interest rates triggered by the vaccine are still weighing on the safe-haven JPY.
Technical levels to watch
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