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  • GBP/JPY remained under some heavy selling pressure for the fourth straight session.
  • The JPY continued benefitting from a US-China spat over the origin of the coronavirus.
  • Awful UK macro data, prospects of an extended lockdown took its toll on the sterling.

The GBP/JPY cross maintained its heavily offered tone through the mid-European session and was last seen trading near fresh six-week lows, around the 131.30 region.

The cross extended last week’s retracement slide from the 135.50 supply zone and witnessed some follow-through selling for the fourth consecutive session on Wednesday amid a combination of negative forces.

Despite the latest optimism over the re-opening of lockdowns in some parts of the world, as is evident from a positive mood around the global equity markets, investors remain concerned about worsening US-China relations.

This comes amid fears over a second wave of a spike in the virus infections, which continued underpinning the Japanese yen’s safe-haven demand and turned out to be one of the key factors exerting pressure on the cross.

The bearish pressure surrounding the cross picked up some additional pace since the early European session, following the release of awful UK Construction PMI, which plunged to 8.2 in April and missed consensus estimates by a big margin.

Adding to this, the ever-increasing number of coronavirus cases and related deaths in the UK, along with increasing prospects for an extended lockdown took its toll on the British pound and contributed to the ongoing fall.

Meanwhile, possibilities of some near-term trading stops being triggered on a sustained break below the 132.00 mark further aggravated the intraday bearish pressure and dragged the cross to its lowest level since March 26.

Hence, some follow-through weakness towards challenging the 131.00 mark, en-route the next major support near the 130.65 region, now looks a distinct possibility as the focus now shifts to the BoE decision on Thursday.

Technical levels to watch