GBP/JPY flirting with daily lows, around 140.00 handle

• Reviving safe-haven demand underpinned the JPY and prompted some selling.
• The GBP was further weighed down by the narrowing gap between Conservatives and Labour party.

The GBP/JPY cross extended its intraday pullback from multi-day tops and is currently placed near the lower end of its daily trading range, around the key 140.00 psychological mark.

The cross initially built on the previous session’s goodish positive and gained some follow-through traction during the Asian session on Tuesday, albeit the uptick quickly ran out of the steam ahead of the 141.00 round-figure mark.

Weighed down by a combination of factors

As investors looked past the recent trade optimism, a slightly cautious mood around equity markets provided a modest lift to the Japanese yen’s perceived safe-haven status and triggered the initial leg of the pair’s intraday pullback.

The selling bias picked up some additional pace during the early European session after the latest poll revealed narrowing gap between Conservatives and the Labour Party at the upcoming UK snap election on December 12.

From a technical perspective, the cross remains well within a broader trading range held over the past one month or so, warranting some caution for positional traders and before placing any aggressive directional bets.

In absence of any major market-moving economic releases, the incoming UK political/Brexit-related headlines and the broader market risk sentiment might continue to act as key determinants of the pair’s momentum on Tuesday.

Technical levels to watch