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  • GBP/JPY witnessed some follow-through selling for the second straight session on Thursday.
  • Some GBP profit-taking, reviving safe-haven demand for the JPY contributed to the downtick.
  • Investors eagerly await updates on the latest round of Brexit negotiations for some impetus.

The GBP/JPY cross remained depressed through the early European session and was last seen hovering near weekly lows, around the 138.70-65 region.

The cross extended the previous day’s rejection slide from the key 140.00 mark and witnessed some follow-through selling for the second consecutive session on Thursday. The downtick was sponsored by a combination of factors – a pullback in the British pound and reviving safe-haven demand for the Japanese yen.

As investors await updates on the latest round of Brexit negotiations, the post-FOMC minutes strong USD rebound prompted some long-unwinding trade around the GBP/USD major. This comes amid a turnaround in the global risk sentiment, which benefitted the Japanese yen’s safe-haven status against its British counterpart.

Thursday’s downfall could further be attributed some technical selling below the 139.00 round-figure mark. A subsequent slide below the 138.60 area (weekly lows) will set the stage for a further near-term depreciating move, possibly towards the 138.00 level en-route the next major support near the 137.80-75 horizontal zone.

In the absence of any major market-moving economic releases, the incoming Brexit-related headlines will play a key role in influencing the British pound. This, along with the broader market risk sentiment will assist traders to grab some meaningful trading opportunities on Thursday.

Technical levels to watch