- GBP/JPY retreats from YTD tops amid reviving safe-haven demand for the JPY.
- No-deal Brexit fears weighed on the GBP and prompted some long-unwinding.
- Investors now look forward to the flash UK PMI prints for some trading impetus.
The GBP/JPY cross edged lower on Friday and dropped to fresh session lows, below the 144.00 mark, erasing the previous session’s gains to YTD tops.
Having witnessed some heavy selling over the past two trading sessions, the Japanese yen (JPY) found some respite on the last trading day of the week amid the prevailing risk-off mood. The World Health Organization warned that a global outbreak of the deadly coronavirus could happen at any time.
GBP/JPY weighed down by a combination of factors
The latest warning by the
fueled pessimism about the global growth outlook. Adding to the market concerns was the rise in the number of newly infected cases outside mainland China – South Korea and Japan. This eventually weighed on investors’ sentiment and benefitted the JPY’s perceived safe-haven status.
Apart from the global flight to safety, persistent worries that Britain might crash out of the European Union at the end of the transition period continued undermining the British pound and further prompted some long-unwinding trade on the last day of the week.
Moving ahead, market participants now look forward to Friday’s important UK macro data, the flash version of manufacturing and services PMI, which should play a key role in driving the sentiment surrounding the sterling and produce some meaningful intraday trading opportunities.
Technical levels to watch
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