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  • GBP/JPY remains under some selling pressure for the second straight session on Tuesday.
  • Fresh concerns about a no-deal Brexit continued exerting some pressure on the pound.
  • Reviving safe-haven demand for the JPY added to the selling bias ahead of UK jobs data.

The GBP/JPY cross continued losing ground through the early European session and dropped to three-day lows, below mid-142.00s in the last hour.

Having failed to capitalize on last week’s strong positive move to three-week tops, the witnessed a modest pullback on Monday and the downtick was sponsored by some renewed fears of a no-deal Brexit.

GBP/JPY weighed down by a combination of factors

The optimism over Rishi Sunak’s appointment as the Chancellor of the Exchequer turned out to be short-lived, rather was offset by a statement from the UK Prime Minister Boris Johnson’s spokesman on Monday.

Johnson’s Europe adviser David Frost said that Britain wants a trade agreement similar to other deals the EU has struck and added that it would not be threatened into following EU rules to win a free trade agreement.

The latest Brexit-related jittered continued weighing on the British pound, which coupled with reviving safe-haven demand for the Japanese yen kept exerting some pressure for the second straight session on Tuesday.

Continuous worries over the economic impact of the deadly coronavirus outbreak resurfaced led to a softer tone around equities on Tuesday, which eventually provided a modest lift to traditional safe-haven currencies.

It will now be interesting to see if the cross is able to attract any buying interest at lower levels or the ongoing slide marks the end of the recent corrective bounce from sub-141.00 levels tested earlier this February.

Market participants now look forward to the important release of UK employment details, which will play a key role in influencing the GBP price dynamics ahead of Wednesday’s consumer inflation figures.

Technical levels to watch