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  • The incoming UK political headlines prompted some selling at higher levels.
  •  Softer UK wage growth data exerted some additional pressure on the GBP.
  • Fading safe-haven demand weighed on the JPY and helped limit further slide.

The GBP/JPY cross quickly retreated around 60-65 pips from the early European session swing highs but now seems to have stabilized above the key 140.00 psychological mark.
The cross initially gained some follow-through traction on Tuesday and built on the overnight positive move, though the momentum fizzled out rather near the top end of a near one-month-old trading range. Comments by the Brexit Party leader Nigel Farage, saying that they will not be offering any more help to the Conservatives, triggered the initial leg of an intraday pullback.

Traders refrained from placing directional bets

The downtick accelerated further following the disappointing release of UK wage growth data, showing that average earnings excluding bonuses increased by 3.6% as compared to 3.8% in the previous month. The figures also showed the biggest annual drop in the number of job vacancies in nearly 10 years and largely offset an unexpected decline in the UK unemployment rate.
Meanwhile, a slight improvement in the global risk sentiment, despite some renewed US-China trade uncertainty, undermined the Japanese Yen’s safe-haven demand and helped limit further losses. The cross remained well within a broader trading range held over the past one month or so, making it prudent to wait for a sustained move in either direction before placing ay aggressive bets.

Technical levels to watch