- Disappointing UK construction PMI exerted some pressure on Wednesday.
- The incoming Brexit-related headlines added to the intraday selling bias.
- The prevalent risk-off mood should keep a lid on any attempted bounce.
The selling pressure around the British Pound picked up pace in the last hour, dragging the GBP/JPY cross to over three-week lows, around the 131.60 region.
Following a brief consolidation earlier this Wednesday, the cross met with some fresh supply during the early European session and added to its recent losses in reaction to yet another disappointing release of UK construction PMI print for September.
Brexit headlines driving the sentiment
The intraday downfall accelerated further on reports, quoting the European Union (EU) sources, that the only option for a new Brexit deal before October 31 is to return to Northern Ireland-only backstop and that time-limit to the backstop is impossible.
The sources further added if this is the final UK Brexit plan, it won’t work and we should then move to discuss an extension of the deadline. However, the fact that the EU stands ready to grant an extension provided some respite to the GBP bulls.
Meanwhile, the prevalent risk-off mood, amid growing fears of slowing global economic growth, continued underpinning the Japanese Yen’s safe-haven demand and might keep a lid on any meaningful recovery attempt, at least for the time being.
Moving ahead, the incoming Brexit-related headlines might continue to influence the sentiment surrounding the British Pound, which coupled the global risk sentiment, might further contribute towards producing some short-term trading opportunities.
Technical levels to watch
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