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  • Reviving safe-haven demand benefitted the JPY and exerted some pressure.
  • Softer UK retail sales added to the UK political uncertainty-led selling bias.

The GBP/JPY cross edged lower through the mid-European session on Thursday and is currently placed near the lower end of its multi-week trading range, around mid-139.00s.
The cross failed to capitalize on its attempted positive move witnessed on the first day of the current trading week and remained depressed for the third consecutive session on Thursday. Reviving safe-haven demand, amid growing uncertainty over a preliminary US-China trade deal, benefitted the Japanese Yen’s safe-haven demand and continued exerting some downward pressure on the cross.

Focus remains on UK political development

The British Pound was further weighed down by Thursday’s UK monthly retail sales figures, which unexpectedly dropped 0.1% in October and fueled concerns about slowing economic growth. Against the backdrop of persistent UK political uncertainty, the softer UK macro data further weighed on the Sterling and contributed to the pair’s intraday slide further below the key 140.00 psychological mark.
From a technical perspective, some follow-through selling will mark a bearish breakdown and set the stage for a further near-term depreciating move. Hence, it will be interesting to see if bears are able to capitalize on the ongoing pullback or the cross continues to attract some dip-buying interest at lower levels.

Technical levels to watch