- The Guppy knocked lower as risk assets get dumped by risk-averse traders.
- The JPY and USD are stepping back up as the safe havens of choice for twitchy markets.
The GBP/JPY traded sharply lower on Tuesday, dropping into 147.20 as risk sentiment took a sharp turn and aw traders piling back into safe havens including the Japanese Yen; market action has stabilized heading into Wednesday’s overnight session, but the Guppy remains constrained near 147.50.
The Sterling saw a sharp retraction yesterday as broader market sentiment turned south as Brexit concerns continue to rob the UK of positioning, helping to send the Sterling lower and taking the GBP/JPY back into last week’s lows.
This week is clear of meaningful data for both the GBP and the Yen on the economic calendar, but traders will be seeing another iteration of the US’ Non-Farm Payrolls on Friday, which will see market participants buckling down ahead of with a thin week between here and then, and Sterling traders will be bracing for continued Brexit negotiation headlines as all sides of the UK’s exit from the Eurozone continue to see little headway in making the exit a success.
GBP/JPY levels to watch
The Guppy is set to take another leg lower as the 21, 50, and 200 hour EMAs spread out as bearish action accelerates, and the GBP/JPY is setting up to make a bearish rejection from the 200-day EMA at 148.20, with near-term support coming from the 50-day EMA at the 146.00 handle, with further support from the last swing low at 142.60.
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